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USA: Are dollar stores a threat to traditional supermarkets?

Grocery is now the top category shopped in the dollar store sector, as found in ChaseDesign’s 2023 Dollar Store Channel Survey, followed by personal care and home goods.

It’s no surprise that amid record-high inflation, dollar stores have become a fast-growing retail channel for food purchases, with an 89.7% increase between 2008 and 2020, according to the American Public Health Association.

The sector is currently focused on growing its grocery volume through increased store count and shopper visit frequency, with Dollar General adding more than 1,000 net new stores each of the last four years, and Dollar Tree and Family Dollar averaging more than 100 each per year during the same period.

Lampertius added that mainstreaming of dollar stores is taking place. In fact, shoppers said that national brands are already about half of their purchases and that they want more frozen foods (51%), more national brands (47%), and more beauty and personal care brands (35%).

Dollar General is already incorporating a new store layout to create an affordable “beauty destination” in its stores. Rather than seeing these stores as a no-frills alternative to larger grocery stores, shoppers are looking for them to resemble their larger rivals more closely.

Source: Jean Forney, ChaseDesign

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