Dollar Stores See Biggest Bump in Brick & Mortar Visits

Millennial shoppers increase overall physical-store visits: NPD

Dollar Store (CSP Daily News / Convenience Stores)

PORT WASHINGTON, N.Y. -- Dollar store shopping visits were up 14% this past retail quarter (May to July 2014), in a brick-and-mortar market that was down 4% overall, according to Shopping Activity Services, the latest report from The NPD Group.

While the rate of decline for brick-and-mortar shopping visits was softened in the most recent quarter compared to the two previous quarters, the dollar store channel continued to see the largest year-over-year share increase in shopping visits, likely driven in part by new- store openings.

"Not many other retailers are opening new stores, focused instead on taking advantage of those already in their stores and maximizing conversion to purchase, as well as expanding their online presence," said Marshal Cohen, chief industry analyst of The NPD Group. "Consumers walk into a dollar store with the intention to buy, not to browse, and almost always walk away with something. In addition, dollar store traffic has been increasing over the past few years because they have expanded their selection of products, making the channel even more useful and pleasing to price-savvy consumers."

Three-quarters of all shoppers in the dollar store channel convert to purchase on each visit, and the amount they spend is up 3% on average since last year. In the past two years, the dollar store channel shopper has become younger, with 50% under 45 years of age, compared to 42% two years ago.

Younger shoppers are walking through more dollar store doors, but the 16-24 age group in particular has increased its number of overall brick-and-mortar visits, with 11% growth among males, and 4% among females. This trend was also evident in the previous retail quarter.

"Millennials are increasing their activity in the market, because as much as online and mobile channels are ingrained in their brain, shopping is still a social behavior for this group. Seeing and touching, as well as researching and deciding where to purchase a product, are all important aspects of their shopping experience," said Cohen. "This omni-channel and omnipresent age group also seeks instant gratification and at the lowest price, which is why younger consumers are also increasing their dollar store visits."

The NPD Group, Port Washington, N.Y., provides global information and advisory services for sectors including automotive, beauty, consumer electronics, entertainment, fashion, food / foodservice, home, luxury, mobile, office supplies, sports, technology, toys, and video games.