Makers of brand-name household staples are increasingly turning to America’s ubiquitous dollar stores to reach more budget-conscious shoppers. Companies like Edgewell Personal Care, Kraft Heinz, J M Smucker, Hershey, Conagra Brands, and Procter & Gamble are bulking up sales teams and adding specialized and lower-cost products to the shelves of dollar stores.
The low-cost retailers are opening thousands of locations each year and adding fresh produce, giving manufacturers with slumping sales a chance to grow. Dollar stores are also installing more freezers and refrigerators for items like budget TV dinners, breakfast sandwiches and yogurt.
Makers of national brands face tougher competition as dollar stores expand their private label selection, even as they continue to rely on well-known brands like Coke and Tide to draw in shoppers. Companies are also introducing more “premium” private label brands, like Dollar General’s Nature’s Menu for pets.
Executives at packaged food companies say the stores are increasingly attractive because they are installing more freezers and refrigerators for items like budget TV dinners, breakfast sandwiches and yogurt. Proprietary data provided by Kraft Heinz shows that Dollar Tree’s Family Dollar chain had the second-highest growth in food and beverage sales in the first quarter.
Makers of national brands are also pushing deeper into dollar stores as a defensive tactic because of what they have seen in Europe – the growth and popularity of discounters like Aldi and Lidl who offer inexpensive private label goods. Companies are also introducing more “premium” private label brands, like Dollar General’s Nature’s Menu for pets.
Overall, dollar stores are providing an untapped channel for consumer products companies to reach budget-conscious shoppers. Companies are introducing specialized and lower-cost products to the shelves of dollar stores in a bid to reach more shoppers and grow their brands.