Bucking the trend--high-income shoppers visiting dollar stores, reports Mintel
CHICAGO, Oct. 7, 2013 /PRNewswire/ -- Dollar stores are popping up all over the US, but it's not just discount shoppers taking advantage of these discount prices. According to new research from Mintel, just under one-third (32%) of respondents from the highest-income households ($150k+) claim not to shop at dollar stores, and half (50%) in this income group say that they are shopping at dollar stores the same amount this year compared to last year. In addition, a further one in ten (10%) are doing so more than last year. This is compared to only 8% in the lowest income group (<$25k) who say they don't shop at dollar stores.
Some 78% of dollar store shoppers say that stores are conveniently located, thus making it easy for them to shop in this channel and almost three-quarters (74%) of dollar store shoppers think that dollar stores offer better prices than other retailers. However, convenience and price aren't the only features driving consumers to these retail havens. Indeed, 59% of Mintel respondents say these stores are pleasant to shop in, while 54% believe brands and products sold at dollar stores are just as good as other retailers.
"Dollar and discount stores benefit from continued consumer caution regarding spending, as well as an improved level of acceptance and satisfaction of the products offered and the shopping experience in these channels," says Ali Lipson, retail analyst at Mintel. "However, some consumers do have a perception of lesser quality offered at these retailers, thus choosing other channels over dollar and discount stores. In order to reverse this perception, dollar and discount stores need to promote brand name offerings to those who are unaware that well-known brands are offered at these stores. "
While it's not surprising that dollar store shoppers in lower-income households are likely to say that dollar stores offer better prices than other retailers, those in the highest household income group are likely to agree with this statement as well. Some 60% of respondents who have shopped at dollar stores and live in households earning $150K or more agree with this. However, this group does tend to have an issue with the brands and products sold. Dollar store shoppers who live in households earning less than $25K are satisfied with the selection (64%), while only 34% of those in $150K+ households find the brands and products at dollar stores just as good as other retailers.
Younger men and women, those aged 18-34, are more likely than those in other age groups to say they are shopping at dollar stores more often this year compared to last year (33% of men and 31% of women versus 24% of all respondents).
"Younger consumers are an important group to target for dollar and discount stores. This group is likely to be from lower-income households as many may be students and others who are starting out in their careers and could benefit from the discount prices and convenience of these venues," concludes Ali Lipson.
Mintel is a leading global supplier of consumer, product and media intelligence. For more than 40 years, Mintel has provided insight into key worldwide trends, offering exclusive data and analysis that directly impacts client success. With offices in Chicago, New York, London, Sydney, Shanghai, Tokyo, India, Malaysia, Singapore and Sao Paulo, Mintel has forged a unique reputation as a world-renowned business brand. For more information on Mintel, please visit www.mintel.com.