• by Jack Loechner , Staff Writer @mp_research, October 18, 2013

According to new research from Mintel, Dollar stores are popping up all over the US, but it’s not just discount shoppers taking advantage of these discount prices. 32% of respondents from the highest-income households ($150k+) claim not to shop at dollar stores, and 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 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.

Total sales through dollar and discount stores reached $180 billion in 2012 and are expected to reach $191 billion in 2013, growing by 6.4%. These channels are among the few that benefited from the U.S. economic recession, as consumers favored these stores for low prices. The outlook for dollar and  discount stores is good—sales are expected to grow by 19% between 2013 and 2018, to reach sales of $227 billion in 2018.

78% of dollar store shoppers say that stores are conveniently located, thus making it easy for them to shop in this channel and 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. 59% of 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.

Ali Lipson, retail analyst at Mintel, says“… dollar and discount stores benefit from continued consumer caution regarding spending… some consumers have a perception of lesser quality… choosing other channels over dollar and discount stores… to reverse perception, dollar and discount stores need to promote (well-known) brand names… offered at these stores… ”

60% of respondents who have shopped at dollar stores and live in households earning $150K or more are likely to say that dollar stores offer better prices than other retailers. However, this group does tend to have an issue with the brands and products sold. 64% of Dollar store shoppers who live in households earning less than $25K are satisfied with the selection, while only 34% of those in $150K+ households find the brands and products at dollar stores just as good as other retailers, says the report.

Men and women, 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 (33% of men and 31% of women versus 24% of all respondents). Ali Lipson concludes that “… younger consumers are an important group to target for dollar and discount stores… likely to be from lower-income households… may be students and others… starting out in their careers… “

The report may be purchased from Mintel here.