According to the 2023 ChaseDesign Dollar Store Channel Survey, dollar stores are not only the fastest-growing retail category, but they also are proving more competitive with grocery stores and mass-market retailers.
Grocery is now the top category shopped in the dollar store sector, the market research and consulting firm indicated, followed by personal care and home goods.
National brands are becoming more important to dollar store retailers as they become mainstream shopping destinations for a wider range of consumers, Joe Lampertius, president of ChaseDesign, pointed out. In the survey, shoppers said national brands are already about half of their dollar store basket and 47% want more. So, national brands are just behind frozen foods, at 51%, in terms of what consumers want to see in greater quantity at dollar stores and ahead of more beauty and personal care brands, at 35%. Rather than see them as a no-frills alternative to larger stores, shoppers are looking for dollar stores to resemble their larger rivals more closely.
Other findings from the survey are:
- Dollar stores have challenges in format, as 72% of consumers mentioned lack of organization, navigation and clutter/cleanliness as the top reasons they find shopping in the sector problematic.
- A typical transaction in the dollar store channel is $25 or less, which suggests the sector still is used primarily for fill-in shopping trips.
- The majority of shoppers never use dollar store retailers’ apps, with 20% saying they didn’t know the stores had an app and 46% never use their websites, indicating that participants in the sector have both a challenge and an opportunity.
- Shoppers using dollar store apps and/or websites are checking sales and specials, looking up product availability and price, using coupons or finding new products.
- Dollar Tree is the easiest store for finding items in the sector while Dollar General rates as the easiest when it comes to finding items online and in the app.
- Half of the shoppers surveyed never order online with dollar store retail but some do, as 36% of survey respondents have picked up in-store.
“The Dollar Store Channel Survey clearly shows customers in the sector want those retailers to offer a product assortment and a shopping experience similar to what they have come to expect at supermarkets and mass merchants. National brands can play a growing part in marketing and merchandising at dollar stores, and retailers can rethink the role of national brands, how products and categories are merchandised and presented, and make their digital experience more engaging and valued by shoppers,” Lampertius stated.
