The dollar store food wars are heating up again

Photo (c) J. Michael Jones - Getty Images

Grocery shoppers can expect more private label and healthier products

Dollar stores are about to take their double-dog dare up a notch in the food aisle. As forecast by ConsumerAffairs last year, Dollar Tree has announced plans to add $3 and $5 price point items in another 1,800 or more stores this year. 

In a recent earnings call, company chief Rick Dreiling added that the company has quietly been expanding $3, $4 and $5 frozen and refrigerated products across the Dollar Tree store base going from zero to 3,500 stores in 2022.

The chain’s refrigerated/frozen section is focused on the things that it can sell at a discount and that most shoppers want in their cart – things like proteins, pizza, and ice cream, drawing positive consumer response. What Drieling sees has made him very happy, too.

“What we are seeing with Dollar Tree plus and multiple price frozen is that when the customer purchased at least one of these items, the basket size is more than double the basket with no multi-priced items,” he said.

More private brands

Private label brands have, in a word, exploded. Recent research from Attest found that 73% of consumers have taken a shine to private label brands and say that even if the economy gets back to its old self, they’ll stick with those off-brand options.

Dreiling said that the trend has improved its own profitability and going forward, grocery shoppers can expect Dollar Tree’s private label brands to have a new persona with new labels and redefined labels, many of which the company is developing in its test kitchen in Chesapeake, Virginia. 

Dollar General is moving food forward, too

Despite Dollar Tree’s latest chess moves, Dollar General should get credit for starting the discount food war, beginning with $1 food items – a dare that it kept up with even after Dollar Tree raised all of its prices by one quarter, to $1.25.

One move that Dollar General has made that Dollar Tree has yet to match is the addition of perishables – fruits and vegetables. Another just-announced move is partnering with a well-known food magazine to develop meal options for shoppers who are looking for more than just opening up a box of mac and cheese.

Dollar General recently partnered with Delish magazine and Mary Alice Cain, a registered dietician and nutritionist, to create new Better For You recipes with healthier options for breakfast, lunch, and dinner.

Each recipe includes recommendations on how to make the dish “Better For You” – such as slow cooker vegetarian chili and cranberry-walnut chicken salad sandwiches – and the majority of ingredients for all recipes can be found at more than 19,000 Dollar General stores. 

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