While the face of physical shopping had already been going through years of transformation with the continued growth of e-commerce and convenience, the pandemic only accelerated that shift. While many retailers announce store closures and bankruptcy, one channel is experiencing growth and success – dollar channel.
Rising unemployment, financial uncertainty and inflation have driven both low-income families and higher-income consumers alike to consider dollar store offerings. The pandemic effected many types of consumers, making the shopper more diverse and giving them a new need to be “frugal.” Additionally, shoppers have been staying closer to home due to the pandemic and rising gas prices, and retailers in the dollar channel have benefited from being in closer proximity to their consumers (75% of the American population live within 5 miles of a Dollar General location).
These trends influenced Dollar General to open both 1102 stores in 2022, and 1000 of their new Popshelf concept stores by 2025. Popshelf offers accessories, decor, cosmetics, and household supplies from $5 or less as opposed to the $1 model.
Our clients at B&G Foods, Rich Products, Citrus World, and Henkel have recognized that their brands, typically targeting traditional grocery models and middle and high-income households, may want to consider adapting to fit into the dollar channel model. On the flip side, there may be value brands within the companies’ portfolio that have a new found audience through the new value channel shopper.