Dollar store traffic continues to grow

9/25/2014 - by Keith Nunes

Three-quarters of all shoppers in the dollar store channel convert to purchase on each visit, and the amount they spend is up 3% on average since last year.

PORT WASHINGTON, N.Y. — Dollar store shopping visits were up 14% this past quarter while the rest of the brick-and-mortar retail market was down 4%, according to The NPD Group’s Shopping Activity Services report. The report’s authors noted much of the dollar store increase may have been driven in part by new store openings.

“Not many other retailers are opening new stores, focused instead on taking advantage of those already in their stores and maximizing conversion to purchase, as well as expanding their on-line presence,” said Marshal Cohen, chief industry analyst for The NPD Group. “Consumers walk into a dollar store with the intention to buy, not to browse, and almost always walk away with something. In addition, dollar store traffic has been increasing over the past few years because they have expanded their selection of products, making the channel even more useful and pleasing to price-savvy consumers.”

Three-quarters of all shoppers in the dollar store channel convert to purchase on each visit, and the amount they spend is up 3% on average since last year. In the past two years, the dollar store channel shopper has become younger, with 50% under 45 years of age, compared to 42% two years ago.

Younger shoppers are walking through more dollar store doors, but the 16-24 age group has increased its number of overall brick-and-mortar visits, with 11% growth among males, and 4% among females. This trend was also evident in the previous retail quarter.

“Millennials are increasing their activity in the market, because as much as on-line and mobile channels are ingrained in their brain, shopping is still a social behavior for this group,” Mr. Cohen said. “Seeing and touching, as well as researching and deciding where to purchase a product, are all important aspects of their shopping experience. This omni-channel and omnipresent age group also seeks instant gratification and at the lowest price, which is why younger consumers are also increasing their dollar store visits.”