Foodservice Solutions® Grocerant Guru® says “Success does leave clues” and one clue that the Dollar store sector has picked up is grocery items drive frequency, frequency drives volume and volume drives profits and continued growth. The Dollar store sector is clearly on a path of growth and grocerant niche Ready-2-Eat and Heat-N-Eat fresh food is the next leg up for them according to our own Groceant Guru®.
Industry veteran Mike Paglia, director of retail insights for Kantar Retail, stated that “from a dollar volume perspective, that's a $14 billion growth opportunity for edible groceries.” Kantar Retail expects the dollar store channel to expand 6.6 percent annually through 2020, making it the fastest growing brick & mortar channel.
It has been widely reported that, at Dollar General, baskets with a perishable item are 50 percent larger than the chain's average. Dollar General and the dollar store sector by offering a wider variety of fresh foods, dollar stores can make the jump from fill-in to secondary or even primary retail destination.
It must be noted that retail destination is well underway as annual sales at dollar stores are approaching $55 billion, with compound annual growth rates averaging 6.5 percent since 2000 — well above the four percent recorded by conventional grocery.
Both Dollar Tree and Dollar General are adding a significant amount of incremental coolers providing space for Ready-2-Eat and Heat-N-Eat products. Bob Sasser, CEO of Dollar Tree, said on the company's Q3 conference call, "The increase in shopping frequency provides Dollar Tree the opportunity to drive incremental sales across all categories, including our higher-margin discretionary products."
Dollar General's new Market format — more than double the size of its average store with expanded frozen and fresh offerings, including produce — is even well positioned to compete against hard discounters like Aldi and newcomer Lidl. Consumers have been migrating to Ready-2-Eat and Heat-N-Eat fresh food for years as regular readers of this blog know. Have you picked up all the foodservice success clues? Are you year over year customer counts up? Do you need Outside Eyes? Are you getting your proper Share of Stomach?
www.FoodserviceSolutions.us specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy. Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit, Linkedin.com/in/grocerant or twitter.com/grocerant Contact Steve@FoodserviceSolutions.us