Dollar Store Close-Up Study

Dollar stores continue to challenge supermarkets, mass merchants and other retailers for share of wallet as more U.S. consumers make the channel part of their shopping routine, according to a new study by Meyers Research Center.The Dollar Store Close-Up study examines behavior, attitudes, and decision-making patterns of dollar store shoppers in North America. The study marks the third time Meyers Research Center has documented consumer behavior in dollar stores in the last six years."As people struggle with higher gas and home heating prices, the mortgage crisis and general economic uncertainty, it's no surprise that dollar stores continue to be part of a routine for many shoppers," said Jeff Friedlaender, vice president, Meyers Research Center. "In the most popular categories, dollar stores are positioned to give other trade channels a run for their money as many individuals indicate that they visit these types of stores at least once a week," he added."Dollar Store customers are looking to save money wherever they can, particularly on routine purchases. That's driving a higher average income shopper into the stores -- more than 10% higher than in 2005," said Friedlaender.The primary objective of the Dollar Store Close-Up program is to develop an understanding of the channel shopper, including who they are, their attitudes and perceptions of the channel, and the underlying dynamics of category and brand purchase decisions.A panel of 22 chain and independent Dollar Store outlets across 12 geographically dispersed cities was utilized for the program. More than 1,000 individuals were interviewed in-store during different day parts on both weekdays and weekends to ensure the inclusion of a wide cross-section of shoppers.In addition to uncovering general channel trends, the study focuses on six popular product categories in dollar stores: beverages, food/snacks/candy, health and beauty care, household cleaners, paper products and housewares.Highlights of the study include:Who is the dollar store shopper?The typical dollar store shopper in 2007 is a 42-year-old female with an average household income of $45,000. Dollar store shoppers spend an average of $7.72 per visit. This is an increase of 22% from 2005 (the last time the Close-Up was conducted).How frequently are dollar stores visited?The majority of channel shoppers (56%) visit a store weekly or more often. Shoppers who visit dollar stores multiple times per week tend to be younger (age 18-24) and less affluent (less than $40,000 in annual income).How has the dollar store shopper profile changed in the last few years? The percent of channel shoppers 45 or older has risen, while the presence of younger shoppers (18-24) has declined. Average household size also has decreased.Average household income has increased from roughly $40,000 in 2003 to $45,000 in 2007."As this channel becomes more established as a destination for household items, we think that it is drawing a slightly older sample of shoppers," said Friedlaender. "In the early days [of the channel's emergence], there was a high level of visiting stores to see what they were about and to look for good deals. As consumers become more accustomed to shopping in the channel, this 'thrill of the hunt' aspect is less prevalent."Meyers attributes at least part of the rise in average income to the growing understanding of product availability within the channel. Higher-income shoppers have "realized that, in certain categories, they can get quality name-brand products at a good price," said Friedlaender.Why do shoppers choose a dollar store?Customer service, convenient location, product selection and quality are more critical for shoppers who visit frequently than it is for other channel shoppers. Channel loyalty is high among dollar store shoppers. In many key product categories, dollar stores are the primary purchase location.What are dollar store shoppers buying?The categories shoppers most often report buying are household cleaning products, household paper products and paper and school/office supplies. Forty to 50% report buying consumables, such as beverages, snack foods, and candy/gum/mints.For more information on the study, contact Jeff Friedlaender at 212-391-0166 or jfriedlaender @meyersresearch.com

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