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Spendy Shoppers Spending More in Dollar Stores

Dollar stores are becoming increasingly popular with middle- and upper-class consumers as the recession drags on, according to new analysis from The Nielsen Company. Nielsen research shows that dollar stores are outpacing other CPG retail channels among shoppers of all income levels.

According to the analysis, 18% of high income shoppers spent more at dollar stores during the second half of 2008 than they did during the second half of 2007. This growth surpassed the 6% of middle-income shoppers who increased their dollar store spending and even the 8% of low-income shoppers who spent more at dollar stores during the second half of 2008, writes Retailer Daily.

Despite this strong high-income customer growth, the typical dollar store customer remains middle- or low-income. Nielsen’s analysis indicates that low-income shoppers represent 45% of dollar store sales, with middle-income shoppers accounting for another 47% of sales and high-income shoppers contributing 8% of sales. According to Nielsen estimates, a total of 65 million U.S. consumers shopped at dollar stores in 2008.

Recently announced positive financial news and growth plans from dollar store retailers supports Nielsen’s findings on the growing popularity of dollar stores across economic lines. Dollar General intends to create up to 4,000 jobs and open 450 new stores this year, following double-digit increases in net sales during Q4 and fiscal year 2008. In addition, Dollar Tree, which sells all items for $1 or less, reported increases in overall sales and same-store sales during Q4 and fiscal year 2008, while Family Dollar will expand its consumable product assortment after seeing a 13% increase in consumable sales during Q2 2009.

The Nielsen Company considers low-income consumers to have an annual income of less than $30,000, middle-income consumers to have an annual income of $30,000 to $99,999, and high-income consumers to have an annual income of $100,000 or more. Dollar stores are considered to be small- to mid-size stores that sell an assortment of CPG products, ranging from household cleaning products to food, usually at low prices. Analysis is taken from the Nielsen Homescan, Total U.S., representing a minimum of 1% of total shopper penetration.