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Dollar Stores Gaining Ground on Grocery, Mass Retailers

Deep-discount retailers poised to capture even more food and non-food grocery sales.

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PHOTO CREDIT: Courtesy of Dollar General PHOTO CREDIT: Courtesy of Dollar General

Dollar stores continue to be the fastest-growing retail channel today, both in terms of the number of new stores and the number of shopping visits. The deep-discount sector is also the fastest-growing retail channel for food purchases, with an 89.7 percent increase between 2008-2020, according to the American Public Health Association.

The dollar-store sector is focused on growing its grocery volume through increased store count and shopper visit frequency, with Dollar General adding more than 1000 net new stores each of the last four years and Dollar Tree and Family Dollar averaged more than 100 each per year during the same period.

New research from ChaseDesign provides insight into how and why dollar stores are capturing a larger portion of shoppers’ grocery spend and what that means for retailers of all channels and brand marketers. Grocery is now the top category shopped in the sector, according to the 2023 ChaseDesign Dollar Store Channel Survey, followed by personal care and home goods. While food and related categories are the most shopped at dollar stores, trips to these locations are most often fill-ins for immediate need and not primary stock-up shops.

“Where people buy their groceries today is evolving quickly,” said Joe Lampertius, president of ChaseDesign. “Dollar stores are getting an increasing amount of their sales from packaged, fresh and frozen foods, and they’re capturing those revenues from traditional retailers like supermarkets and mass merchants. This emerging competition needs to be top of mind for those retailers as they strategize how, when and where to engage their shoppers.”

ChaseDesign fielded an online survey in March 2023 through its proprietary research platform, mPulse, amongst 1000 consumers between the ages of 25-54. Respondents were screened to be the primary or secondary shopper in their households.

Click here for more survey results.

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