Fighting for Every Dollar

Study shows dollar-store consumers want much of what c-stores got

CHICAGO -- A mere few years ago, dollar stores were barely a blip on the retail radar screen. Today, they are the fastest-growing retail channel in the United States, increasing in store count by close to 50% from 2000 (11,683 stores) to 2004 (17,070 stores) and achieving 67% household shopper penetration (vs. 55% in 2000), according to ACNielsen's Homescan data source.

We are seeing increasing shopper counts in dollar stores and increasing frequency, said Homescan's Mary Pietsch during an FMI Show educational seminar on Monday titled Defending Against [image-nocss] the Dollar Store. While noting that no channel of retail is immune to losing share to dollar stores, the list of services Pietsch suggested retailers focus on to defend themselves gives convenience operators a number of head starts.

The Food Marketing Institute's FMI Show wraps up in Chicago today.

After noting that the typical dollar-store customer is quickly changing from downscale, rural and African American to high-income bargain hunters, Pietsch said Homescan asked consumers which services they would most like to see local retailers enact. The list shows great promise for convenience store retailers.

The top 10 services chosen by heavy dollar-store shoppers included:

In-store samples. Self-checkout lanes. Longer store hours. Video rentals. On-premise gasoline pumps. In-store cooking lessons. Coffee shop. Drive-thru pharmacy. Pick up/deliver to car. Bulk section with candy.

Pietsch also outlined some standard characteristics of these heavy dollar-store shoppers, noting that they view shopping as an event and are budget-minded. The characteristics included:

Like to shop at a wide variety of stores for groceries. Like that dollar stores are easy to shop with young children. Prefer small grocery stores to large ones. Like stores that make shopping exciting. Budget when grocery shopping because they have to, not want to. Shop multiple stores for best deals on groceries. Prefer store brands. Use their primary grocery store mainly for fresh fruit, vegetables and meat. Like stores that offer free samples. Like to feel special when going to a store.