As American families are looking to cut costs amid historically high inflation, shopping at dollar and discount stores has increased precipitously.
Spending on grocery products at discount chains surged by 71% from October 2021 to June 2022, while the same spending in traditional grocery stores decreased by 5% during that stretch, according to The Wall Street Journal. This increase is largely due to elevated prices across the economy, the WSJ reported, as the Consumer Price Index (CPI) surged 9.1% year-over-year in June, and the food-at-home index outpaced even that at 10.4% year-over-year.
As of mid-June about 90% of Americans were concerned by rising food prices, and 52% reported making fewer trips to the grocery store to cope, according to The Harris Poll.
As a result dollar stores are experiencing marked increases in foot traffic as an alternative, with some data compiled by Placer.ai suggesting that the industry’s locations had 20% more weekly visits in the second quarter of 2022 than during the same time pre-pandemic in 2019. (RELATED: ‘Higher Than We Expect’: Top Fed Official Issues Grim Prediction On Reining In Inflation)
While Dollar General’s core demographic is households with incomes under $40,000 a year, those making more have also begun to shift to the chain, CEO Todd Vasos said on an earnings call in late April, according to CNN Business.
“Shopping patterns are definitely changing, and we’re seeing it happen right before our eyes,” Vasos said.
Dollar General says inflation has led to more visits from lower-income shoppers, trade down by wealthier shoppers and consumers shopping at stores closer to their homes to save gas. https://t.co/LLiEfxuytY
— Nathaniel Meyersohn (@nmeyersohn) June 9, 2022
But many of those relying on dollar stores for their sustenance express concern about the nutritional value of the goods they’re getting.
“Everything in there is super-duper sweet,” Phoenix Kamlo, a tailor and head of a family of five in Wichita, Kansas, told the WSJ. “But it’s nearby, and it’s cheap.”
Dollar stores are likely to exacerbate existing diet-related health disparities, according to a fact sheet from the Center for Science in the Public Interest. Roughly 2,300 Dollar Generals across the country currently stock fresh produce out of more than 18,000 total locations, a Dollar General spokeswoman told the WSJ.
Dollar Tree sees itself as complementing, not replacing grocery stores, a spokesperson for the chain told the WSJ.
“When dollar stores can sell products at half the price, of course most low-income, working rural folks plus everyone dealing with higher costs are going to choose them over more expensive options — even though the local options would be healthier and support the local economy,” Nick Cartwright, a rural organizer and state senate candidate concerned with how dollar stores have been affecting nutrition and farmers in his home state of Arkansas, told the Daily Caller News Foundation.
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