2011 dollar store shopper study-research highlights

Prepared by Meyers Research Center www.meyersresearch.com

2011 DOLLAR STORE SHOPPER CLOSE UP STUDY TM

WAVE V

An In-Store Intercept Shopper Insights Research Program

-Selected Study Highlights-

January, 2012

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The Following Contains Selected Highlights From Meyers Research Center’s

2011 Dollar Store Shopper Close Up (Wave V)

To Learn More About Purchasing the Full Report, Contact a Meyers Research Center Representative:

Jeff Friedlaender 646 512 5137

[email protected]

Frances Glick 646 512 5125 [email protected]

George Brown II 646 512 5124 [email protected]

2011 Dollar Store Shopper Close Up Study www.meyersresearch.com 2

• The dollar store channel continues to grow and evolve. Even in a down economy, the larger dollar store chains continue to grow revenue, post profits and open new stores expanding their customer base. Many dollar store chains have modified their product selection to include more national brands (and for the larger chains, their own store brands) and a larger variety of food and beverage products. The larger chains are also now taking advantage of e-commerce capabilities on their websites to grow sales.

• The combination of an expansion of products offered, more convenient locations, a manageable size and low prices, have positioned dollar stores as a threat to other types of retailers (e.g., c-stores, drug stores, mass merchandisers, warehouse clubs) to obtain a greater share of the consumer’s dollar. The challenge for manufacturers of consumer goods is how to best position themselves to take advantage of this opportunity.

• This summary of study highlights represents wave five of the Dollar Store Shopper Close-Up Study TM. This bi-annual in-store shopper insights research program identifies consumer shopping behavior, attitudes and decision-making patterns in Dollar Stores.

• The learning from this research program can serve as a powerful tool for helping manufacturers develop and/or improve strategies for doing business within the environment of this dynamic, growing channel.

Background


Program Objectives

• The primary objective of the Dollar Store Shopper Close-Up Study TM is to provide an understanding of the dollar store customer, including:

– Who is the dollar store shopper – what is their demographic profile and dollar store

shopping habits, – What are shoppers’ attitudes toward and perceptions of dollar stores, – What are the underlying dynamics of category and brand purchase decisions in dollar

stores including:

• When, how and where specific category and brand decisions are made • Planned versus impulse purchasing • Influence of in-store and external factors • The decision sequence hierarchy utilized by shoppers to make their purchase

decisions • The effect of the economy on Dollar Store shopping and

– How has the Dollar Store shopper’s profile, behavior and attitudes toward this channel changed since last measured.


• This research was conducted via in-store intercept interviews with adult consumers as they were exiting the dollar store, immediately after they finished paying for their purchases. The interview included:

– A general section covering shopper background information, attitudinal measures, general shopping trip characteristics and items purchased during that store visit (market basket).

– A section covering in-depth information about the decision-making process for specific items purchased.

• Interviewing locations included a panel of chain and independent dollar store outlets representing the four geographic regions. Where possible, the same chains/store locations utilized in 2009 were included. Interviewing was conducted during different day parts and on both weekdays and weekends to ensure the inclusion of a wide cross-section of shoppers.

• The general report focuses on popular product categories in dollar stores: CSDs, other ready to drink beverages, snack food, candy/gum/mints, beauty care, health and personal care, household cleaners/chemicals and household paper & plastic products. *

• Where relevant, findings are also analyzed by: – Store Type: Extreme Value (multiple price points) vs. Single Price ($1 or 99 cents), – Shopper Profile (Household Income, Age of Shopper) and – Dollar Store Shopping Frequency (Heavy, Moderate, Light).

* A custom analysis of your category may be included in your full report. Contact a Meyers’

representative for more details.

Study Design and Methodology

5

Who is the Dollar Store Shopper

Base: Total Shoppers (random sample) 2011

(1024) 2009

(1002) 2007

(1063) 2005 (999)

Shopper’s Age (Mean) 44.6 40.8 42.0 41.8

Mean Annual Family Income ($000s) 52.2 37.1 45.2 39.9

Shopper’s Gender – Female 76% 67% 77% 77%

Ethnicity

White 59% 46% 54% 59%

Black/African-American 23% 25% 25% 23%

Hispanic/Latino 13% 27% 17% 16%

• The dollar store customer base is changing: – Shoppers are skewing older, – Household income has increased, – Female shoppers are becoming more dominant, – Ethnic diversity has decreased.

2011 Dollar Store Shopper Close Up Study www.meyersresearch.com

6

How Have Their Shopping Habits Changed

• Many shoppers have increased their visits to dollar stores over the past year. Concurrently, they have decreased visits to other channels (e.g., c-stores, drug stores and warehouse clubs).

Base: Shop in this channel (random sample) Have you been shopping in this store more, the same or less over the past year?

45%

9%

11%

30%

18%

17%

51%

57%

66%

55%

70%

57%

4%

34%

23%

15%

12%

26%

Dollar Store

C-Store

Drug Store

Mass Merchandiser

Supermarket

Warehouse Club

More The same Less


7

What Categories are Most Likely to be Purchased in Dollar Stores

• Product categories most likely to be purchased in dollar stores include: household cleaning products/chemicals, greeting cards, gift wrap and bags, household paper and plastic products, snack food and candy, gum and mints. Reported purchasing has increased for these (and many other) categories.

NA-Information not available. Which of the products on this card are you most likely to purchase when you come to dollar stores like this one?

Base: Total Shoppers (random sample)

2011 (1024)

%

2009 (1002)

%

2007 (1063)

%

2005 (999)

%

Household cleaning products/chemicals 63 51 78 68

Greeting cards/gift wrap/bags 60 31 61 NA

Household paper and plastic products 56 43 74 65

Snack food 50 45 53 63

Candy, gum and mints 50 32 41 56

Health and beauty care products 48 39 61 49

Seasonal merchandise 48 24 54 47

Beverages 45 46 54 59

Batteries/flashlights/chargers 44 21 63 50

School/office supplies 38 24 50 NA

Housewares and giftware 33 24 57 46

Domestic items–blankets, sheets, towels 29 18 33 29

Toys and games 24 15 34 34

Hardware, tools, automotive and garden supplies 24 16 41 30

Canned foods 23 18 NA NA

Apparel/footwear/accessories 23 21 39 34

Pet food and supplies 20 16 24 19


8

What are the Key Factors in the Decision to Visit a Dollar Store -Top 2 Box (Rated 10, 9)-

• Good value for the money is the most prominent factor when choosing a dollar store. Other key factors include: convenient location, clean/well maintained, good quality products, good customer service and always has products wanted in stock.

• The importance of value has increased while many other considerations have become less important.

Now I’m going to read some factors and I’d like to know how important each is when you decide to visit any dollar store. We’ll use a scale from 1 to 10, where “10” means the factor is extremely important in this decision and “1” means it is not important at all.

Base: Total Shoppers (random sample)

2011

(1024)

%

2009

(1002)

%

2007

(1063)

%

2005

(999)

%

Good value for the money 71 61 90 83

Conveniently located near home/work 59 66 79 75

Clean and well maintained 59 63 80 78

Good quality products 55 57 78 76

Good customer service 53 65 85 80

Always has products wanted in stock 51 56 82 71

Fast checkout 49 60 80 76

Good selection of different types of products 49 55 79 77

Store layout makes it easy to find what you’re looking for 48 56 78 68

Good sales, promotions, special offers 42 49 68 63

Has recognized name brand products 39 41 50 52


9

56%

49%

38%

30%

42%

53%

37%

38%

49%

61%

67%

57%

43%

39%

60%

6%

4%

1%

3%

60%

1%

3%

1%

2%

64%

64%

53%

38%

60%

77%

78%

78%

30%

34%

46%

59%

39%

19%

21%

20%

6%

3%

4%

1%

2%

1%

1%

2%

CSDs

Other RTD Beverages

Snack Foods

Candy/Gum/Mints

Beauty

Personal/Healthcare

Household Cleaning

Household Paper & Plastic

Before coming to this store After entering this store Don't know

When is the Decision Made to Buy a Type/Brand of Product -By Product Type Purchased-

• For many key dollar store categories, the decision to buy is made prior to coming to the store. However, food categories tend to have higher levels of impulse buying versus others.

• Brand planning is high for household cleaning products, CSDs and personal/healthcare items. In-store brand decision making is more salient for food, paper & plastic and beauty products.

Base: Total products (random sample) *Branded products only. Did you decide to buy a product like this before you came into the store today or after you entered the store? Which one of the following statements best describes when you decided to buy this brand of (ITEM TYPE)? (READ LIST)

Product Bought Type Decision Brand Decision*


Just Some of the Other Areas Addressed in the General Report of Findings Include: • What type of shopper visits dollar stores most frequently? • What effect has the poor economy had on shopping in dollar stores and what does it suggest

for the future? • Why do shoppers choose dollar stores over other trade channels? • What is in the dollar store market basket? What is the total amount spent? How have these

indicators changed over the past 2 years? • For Key Categories:

— How much do shoppers spend? What is the share of market basket? How have these changed since 2009?

— What is the purchase decision hierarchy that shoppers use to make their product choices? — What is the primary reason for purchase? — What is the impact of in-store and out-of store purchase influencers?

And more! For More Information About the 2011 Dollar Store Shopper Close Up, Contact:

Jeff Friedlaender - 646 512 5137 [email protected] Frances Glick - 646 512 5125 [email protected] George Brown II - 646 512 5124 [email protected]

2011 Dollar Store Shopper Close Up (Wave V)

2011 dollar store shopper study-research highlights

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