According to analytics firm InMarket, grocery sales at discount stores such as Dollar Tree and Dollar General spiked 71 percent between October 2021 and June 2022. Conversely, sales of the same items in grocery stores dropped five percent during the same period.
Bulk store Sam’s Club, which is owned by Walmart, saw a 10.5 percent increase in its May income from last year. Meanwhile, discount supermarket Aldi saw “significant spikes” in consumers, with 2.5 million new shoppers arriving in May alone.
The increase in foot traffic and revenue reported by discount stores comes amid grocery giants such as Walmart informing customers of impending food price hikes while slashing prices on non-food items. The latter has gone unsold for several months as consumers tighten their budgets. (Related: Retailers to raise prices for thousands of food products in 2022.)
Walmart CEO Doug McMillon said in a statement: “The increasing levels of food and fuel inflation are affecting how customers spend. While we’ve made good progress clearing hardline categories, apparel in Walmart [U.S.] is requiring more markdown dollar.”
Only about 2,300 of the more than 18,000 Dollar General locations across the country carry fresh produce. However, a spokeswoman said the company is expected to stock fresh produce at 10,000 locations over the coming years.
“While Dollar General isn’t a full-service grocer, we consider ourselves today’s general store by providing nearby and affordable access to daily household essentials, including the components of a nutritious meal,” she said.
Dollar Tree echoed its competitor’s remarks, with a spokeswoman for the discount store chain saying that it aims to complement grocery stores, not replace them. She added that most of the company’s 16,162 stores nationwide offer frozen fruits and vegetables, sugar-free groceries, legumes, whole wheat options, milk and eggs.
Americans tightening their belts as inflation worsens
Some families who have turned to dollar stores for their essentials shared with the Wall Street Journal (WSJ) how they cope with inflation.
Despite some dollar stores having fresh produce in stock, most of them only have boxed and canned food high in sugar – which undermines Americans’ health in the long run. Businessman Phoenix Kamlo acknowledged this fact.
“Everything in there is super-duper sweet. But it’s nearby, and it’s cheap,” he said.
Kamlo, who owns a tailoring and alterations business in Wichita, Kansas, said his income has gone down in recent months. Given this scenario, he has been relying on Family Dollar – owned by Dollar Tree – for a huge share of groceries to feed his family of five.
Single mother of four Elayna Fernandez, meanwhile, purchased a Sam’s Club membership to buy more products in bulk. She also switched to store-brand versions of almond milk and granola bars. The 45-year-old Fernandez also took steps to ensure her daughters do not use more shampoo and conditioner than they need.
“I am very conscious about not using a lot of these products,” she told the WSJ.
According to the Department of Commerce, consumer spending rose 1.1 percent in June – a jump of almost four times from the 0.3 percent recorded in May. Economists said lower-income families are switching brands, saving less and cutting what they can. Other households, they added, are either buying in bulk or making do without certain items that used to be included in their shopping lists.
Meanwhile, Morning Consult Chief Economist John Leer warned that inflation will continue down the line – translating to even more pain for families. “Inflation will likely remain elevated, at least through the summer, given its current momentum and its spread from goods to services,” he said.
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Watch this video that discusses why dollar stores are able to sell food items for low prices.
This video is from the Weltansicht channel on Brighteon.com.
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