A major challenge for dollar retailers is many consumers, both regulars and new, often don’t realize the stores even carry fresh produce.
“The biggest barrier is how to get the word out,” says Phil Lempert, founder of SupermarketGuru.com, based in Santa Monica, CA.
Julie DeWolf, founder and CEO of DeWolf Marketing BB #:376983 in Redondo Beach, CA, is on the same page.
“Dollar stores are popping up everywhere,” she says, but many shoppers are often surprised at the assortment of products, especially fresh produce.
Lempert expects dollars stores’ produce merchandising and operations to get more sophisticated as they move past the early stages and experiment with new configurations and techniques.
One example of stellar merchandising occurred in October.
“Right before Halloween, I went to a Dollar General and the pumpkin display was gorgeous,” he notes.
Adding more fresh product, creative merchandising, and effective messaging will all help dollar stores sell more fruits and vegetables, but are they a threat to traditional grocers?
Most analysts don’t think so, and suppliers believe in a more-the-merrier scenario.
“I’m a big fan of having produce in dollar stores,” DeWolf says. “More produce in the market is always welcome, so good for them for figuring it out. It’s another opportunity for consumers to buy produce, which is great for everyone.”
Bill Bishop, chief architect and co-founder of Brick Meets Click in Barrington, IL, doesn’t think dollar stores will necessarily crowd anyone out of the food retail sector.
“It’s one of the newer ways produce will achieve distribution in hard-to-reach communities—it’s basically the filling-in of a need where it didn’t exist before.”
There is, however, a caveat: “They have to perfect the model before they can do more,” insists DeWolf.
Lempert agrees. “My worry is dollar stores will expand their assortments too fast and not do it right,” he says. “It’s better to have fewer products and really do it right, versus carrying 400 like a grocery store and taking it on the chin.”
This is an excerpt from the cover story of the March/April 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.
