During this challenging time of food inflation, more shoppers are turning to dollar stores for groceries. The rising food costs are driving consumers to get more options about where to go for groceries. The consumer price index is an inflation gauge that measures the cost of goods and services, which started to ease recently. The food prices were up again, the U.S. Department of Labor reported. Over the last year, food prices have risen above 10 per cent. Egg prices rose 60 per cent, butter rose 31 per cent, and lettuce jumped 25 per cent. This record is according to Labor Department data through December.
So, consumers are looking for ways to save. For many, that means shopping at their local dollar store. Dollar stores are attracting more grocery shoppers. Slowly, discount dollar stores’ share of the total grocery spending went up. This is according to a recent report from Coresight Research. Now, more than 1 in 5 customers buy groceries at dollar stores, according to the Coresight Research weekly U.S. Consumer Tracker report.
To lure shoppers, category giants of the company, Dollar General and Dollar Tree (which also owns Family Dollar) were adding stores and remodelling with more refrigeration units. It expanded grocery offerings that included healthier foods and fresh produce. This is according to the Coresight report. The report further said that if the two retailers continue to improve the quality of their fresh food and maintain the low prices associated with their brands, then there is a good chance that it will bolster their value proposition and their existing customer base. Also, it will pull in new customers from the higher-priced retailers.
Comment of the consumer analyst, Julie Ramhold
The shoppers are considering some alternatives to get lower prices. The consumer analyst, Julie Ramhold, said it is about making the dollar go a little further. But, the value is not always there. She said that despite the name, a customer would be hard-pressed to find items that are just a dollar. It is important to always check the unit price. Also, compare it with the offerings at other stores, like Trader Joe’s and Walmart.
Also, Ramhold further said that the grocery assortment should be smaller than what you can find at a warehouse club or the supermarket. The fruits and vegetables can be limited to more shelf-stable offerings such as bagged salad mixes and bananas, Further, a customer may find items near the expiration date. So, she said that shoppers could focus on staples, like pasta, rice, and dried beans, which can fit into different cuisines and do not cost very much.