July 16, 2014

NOTHING COSTS MORE THAN IT USED TO:

Dollar Stores Want to Be Grocery Stores, But Cheaper (Venessa Wong, July 15, 2014, Businessweek)

Dollar stores have added plenty of food--and alcohol--to their shelves in recent years to lure customers who are interested in more than disposable cups and paper goods. Offering speed, goods in smaller volume, and value, the strategy seems to be working. The addition of products, from milk and eggs to brand-name packaged goods such as Special K (K)cereal and Hamburger Helper have resulted in rising food sales at chains such as Dollar General (DG), Family Dollar (FDO), and Dollar Tree (DLTR).

As more consumers see the dollar store as a legitimate place to shop for food, manufacturers--from such giants as General Mills (GIS), which recently started selling Fiber One products in the dollar outlets, to trendy startups like vegan mayo maker Hampton Creek--are vying with the chains' more-profitable private brands for shelf space.

It's a particularly good place to buy milk, soy milk, bleach, toothpaste, shampoo, etc.

The failure of official measures to catch these substitutions is one of the reasons deflation is understated.
Posted by at July 16, 2014 3:38 PM
  
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