DOLLAR STORES TAKE HBC SHARE FROM FOOD

DAN ALAIMO

CHICAGO -- Dollar stores are the fastest-growing retail channel and are taking market share away from supermarkets, including in health and beauty care and general merchandise, said a speaker at last week's Food Marketing Institute show here.

"In HBC, you are seeing more and more product categories being carried in these stores," Todd Hale, senior vice president, consumer insights, ACNielsen, Schaumburg, Ill., told SN after his presentation. "In almost every case where there is a share increase for dollar stores, it is impacting grocery."

The top two dollar store chains, Dollar General and Family Dollar, had 9,100 stores in 2001, a threefold growth from 1993, Hale noted. The top five chains now have over 12,000 stores and total sales of over $12 billion, he said. About 60% of U.S. households visit dollar stores at least once a year.

"They are the fastest-growing channel with the greatest increases in stores. They are no frills; they are low overhead. Most of them have an average square footage of between 6,000 and 8,000 square feet," he said.

The annual compounded growth rates of these stores is expected to be in the 10% to 11% range through 2003, Hale said.