Three Million New Consumers Shop in Dollar Stores

Discussion
Oct 30, 2002
George Anderson

By George Anderson


Dollar stores are ringing up the dollars according to a new consumer report from Information Resources, Inc. (IRI), IRI Insights on Dollar Stores.


IRI estimates that the channel is generating annual sales of $12.5 billion as consumers increasingly turn to dollar stores for items once purchased in other formats.


Key findings of IRI’s research include:


  • Dollar stores captured three million new shoppers in the past year.

  • More than 50 percent of the heaviest shoppers in other channels (food, drug, mass, etc.) also shop in dollar stores.

  • Consumers are attracted to dollar stores for a combination of price and convenience factors.

  • Dollar store shoppers are heavily influenced by deals and less brand loyal.

  • HBC and food items are the fastest growing product categories in dollar stores.

 



























































































Top
15 Category Growth Based on Spending Per Dollar Store Shopper




Dollars
Per Buyer


%
Change/Yr Ago


Cold/Allergy/Sinus
Tabs


$7.97


157%


External
Analgesic Rubs


$2.63


107%


Internal
Analgesics


$6.43


100%


Cold/Allergy/Sinus
Liquid


$4.68


76%


Rug/Fabric
Treatment


$4.16


64%


Denture
Products


$5.32


62%


First
Aid Treatments


$1.94


56%


Canned
Meat


$4.54


55%


Salad
Dressings


$2.84


54%


Gastrointestinal
– Liquid


$4.90


53%


Frozen
Meat


$7.24


48%


Cough
Syrup


$2.97


47%


Mouthwash


$4.94


40%


Skin
Care


$8.05


39%


Vitamins


$12.23


38%


SOURCE:
IRI Household Panel, 52 weeks ending June 30, 2002,

ranked on % chg in dollars per buyer in dollar stores. Total US dollar
stores.


 


Moderator’s Comment: Are dollar stores drawing from
a larger cross-section of consumers than is generally assumed? What are the
growth prospects for the channel?


IRI’s research seems to support this notion. Our view
is simple. Consumers like to find deals regardless of their income bracket.
Dollar stores, once found only in less affluent areas are now popping up in
the same shopping centers as upscale grocers such as Kings and the drugstore
giant Walgreen’s.
[George
Anderson – Moderator
]

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