Pretty much everybody loves a deal (except maybe that baby in the commercial with Jimmy Fallon) and the desire to save money has fueled growth in the dollar store channel going back to even before the Great Recession. New research from Mintel projects continued growth for dollar stores as the channel increases its footprint and chains add name brands trusted by consumers.
Among all dollar store shoppers, 78 percent point to store location as the primary reason for shopping while 74 percent cite price. Fifty-nine percent say dollar stores are a "pleasant" place to shop and 54 percent believe brand and product quality in the channel is as good as that found in other outlets.
Consumers with the most negative view of product quality in dollar stores are those living in affluent households, reports Mintel. Only 34 percent of consumers in households with over $150,000 in annual income think the items sold in dollar stores are on par with other channels.
As has been widely reported in the past, affluent consumers are a small, but important shopping segment for the channel. Fifty percent of consumers in $150,000+ households are currently shopping in the channel the same as last year, while only 10 percent are shopping more.
"Some consumers do have a perception of lesser quality offered at these retailers, thus choosing other channels," said Ali Lipson, senior retail & apparel analyst at Mintel, in a statement. "In order to reverse this perception, dollar and discount stores need to promote brand name offerings to those who are unaware that well-known brands are offered at these stores."
How concerned should dollar stores be with changing negative perceptions that consumers hold about the channel?