East Valley flocking to discount stores - East Valley Tribune: Business

East Valley flocking to discount stores

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Posted: Tuesday, March 4, 2003 10:16 pm | Updated: 1:11 pm, Thu Oct 6, 2011.

Charlotte Hoose of Scottsdale filled her shopping cart with bananas, Duncan Hines cake mix and frosting, and an assortment of canned goods as she swept through the aisles of a 99 Cents Only store.

“They have good products and good buys,” Hoose said.

U.S. consumers are heading for supercenters and dollar stores in greater numbers to buy food and household goods, according to a study released Tuesday by national pollster ACNielsen.

While grocery stores still get the bulk of the buying — with all of the consumers spending at least some of their household budget at the traditional giants — the cheaper alternatives are growing in popularity.

ACNielsen installed scanners in more than 65,000 U.S. households to track what people are buying and where they are buying it.

The 2002 results show a continued surge in bargain-store buying.

Supermarket trips slipped to an average of 73 per household in 2002, down from 83 in 1999, the first year of the study, but still way ahead of any alternative shopping haunt.

Mass merchandisers such as Target and Wal-Mart were closest in popularity to supermarkets, with 92 percent of the consumers making at least one shopping trip to those last year, and the average household stopping by 22 times. Still, that was down from 95 percent in 1999, and an average 26 trips a year.

The biggest ground-gainer, ACNielsen found, is the supercenter category — the versions of those mass merchandisers with full supermarket components. In 2002, 63 percent of the households tracked had shopped in a supercenter, up from 52 percent in 1999.

Dollar stores made lots of headway too, according to ACNielsen. Overall, 62 percent shopped at least sometimes in dollar stores in 2002, up from 52 percent in 1999. “New store openings are helping fuel the growth of supercenters, dollar stores and warehouse club stores,” said Todd Hale, senior vice president, consumer insights for ACNielsen U.S.

“Those channels are competing vigorously with the grocery channel. In order to defend their turf, grocery retailers need to focus on perimeter departments, making sure their fresh departments — produce, baked goods , meat, seafood and deli — are the best in town. Let’s face it, today you can get pain relievers at office supply stores and snacks at video rental stores, but not everyone can do a great job with fresh produce.”

Robert Maneri of Chandler shops the dollar stores, “every couple of weeks,” and picks up lots of staples, but he shops at his local supermarket for meat and produce.

“You just can’t do without a supermarket,” he said. Nearly a third of the consumers tracked by ACNielsen shopped at least 29 different stores — a category the company dubs “heavy grazers.”

Among the heavy grazers, warehouse stores such as Costco or Sam’s Club are popular with the biggest spenders, according to ACNielsen, with 54 percent of the warehouse store sales coming from the more affluent shoppers last year. Middle-class households are tops at mass merchandisers and supercenters. Thirty-seven percent of the sales in the mass merchandisers and 36 percent in the supercenters came from the middle-income spenders. At the dollar stores, 29 percent of the dollar store sales came from the middle class and 13 percent from the affluent, as the retail category gained acceptance and territory, Neilsen reported.

The trend has been noted by California-based 99 Cents Only stores which opened its first Valley store two years ago and added 10 more stores since.

“There is a myth that you get what you pay for,” said Eric Schiffer, 99 Cents Only president. “We’ve seen a trend that more educated consumers are learning that’s not necessarily true.” Schiffer said the stores attract all income levels, with the Beverly Hills location the most lucrative of the 153 stores in the chain.

“That store did $9.9 million last year,” Schiffer said. “The average 99 Cents Only store does $4.8 million. That’s why we put a store in a place like Scottsdale.”

Schiffer said dollar stores can keep prices low by offering brand names but in limited variety.

“We may have three name-brand toothpastes, not 20, so we can buy those in large volumes,” he said.

The trend for consumers to spread their shopping dollars around is not escaping the attention of the supermarkets, said Mimi Meredith, spokeswoman for Chandler-based Bashas’.

“It’s happening across the industry,” she said. “We are aware of the fact that we have to be more creative, more aggressive and give customers compelling reasons to stay in our stores.” Bashas’ has been stocking more bulk items, adding more convenience items, such as chef-prepared entries, and adding services from banks to child care, she said.

“If parents can get all their shopping done in Bashas’ where their child is supervised by a child-care specialist, they are more likely to stay and shop,” Meredith said.

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