Research of the Retail Cities team is currently asking the important question, “How are consumers who live pay-event to pay-event doing these days?”
There are two ways to look at this.
1) Using government statistics on income and poverty
2) Looking at the success/failure or retailers that target these consumers
We don’t think you need to pick from one or the other, you can pick both.
A simple way to do this is to take a statistic on poverty and then combine it with a statistic on value retailer presence.
For instance, we took what the US government calls the “200% above the official poverty line” statistic and combined it with the number of discounter Dollar General stores per 100,000 residents, by state. This gives you a very good sense of where cash-strapped consumers live and whether the value retailers are servicing those consumers. The answer, in the case of Dollar General, is that they have a perfect match-up.
We also looked at leading ‘value’ retailer performances such as Dollarama in Canada and Five Below in the USA. The numbers are pretty striking.
Dollarama now generates over CAD$ 5 billion in annual revenue across 1,486 stores in Canada. They also do strong business in Central America via a Dollar City investment.
Discounter Five Below exceeded USD$ 3 billion in annual revenues across 1,340 stores in 42 of the US 50 states. Of the USD$ 3 billion, 23.2% comes from the new snacking category.
Discounter Aldi exceeded USD$ 11 billion in annual revenues across its more than 2,100 stores in 38 US states. Read also here why Aldi outpaces the competition: USA: Aldi is the fastest-growing grocery chain (discountretailconsulting.com)
When you look at things both ways, it's very clear that there are more consumers living pay event to pay event in 2023 and there are a lot of sophisticated retailers, growing quickly, operating in this space.
The Dollar Store / Value Retail segment is the fastest growing segment of retail. That's a trend that will continue.
Read more: Cash Strapped Consumers | LinkedIn
Comentários