Inflation-battered shoppers turn to dollar stores for groceries

High prices in the supermarket aisles for basic food items like eggs, milk and butter have driven more shoppers to seek out bargains at dollar stores, according to a recent study.

More than one in five shoppers have turned to low-budget brands like Dollar Tree and Dollar General to restock their fridge, according to Coresight Research’s weekly consumer US Consumer Tracker.

The price of a dozen eggs has shot up year-over-year by 60% — to an average of $4.25 — while both milk and butter have spiked 31% since last year, according to government data.

A Dollar General in the Bronx sells a dozen cage-free eggs for $4.95 — compared to $6.99 at a nearby Stop & Shop. A 15-ounce tub of I Can’t Believe It’s Not Butter was $4 at the Dollar General store, compared with $5.19 at that same Stop & Shop in the Kingsbridge section of the borough. A gallon of whole milk was $3.90, or $1.29 cheaper than at that supermarket.

Generally, dollar stores do not carry as many fresh items as traditional grocery stores – but that’s changing.

Dollar stores have been adding more refrigeration units to their stores and expanded their offerings to include healthier foods and fresh produce, according to a CNBC report citing Coresight data. 

Another study by Placer.ai showed foot traffic to the dollar stores in January increased 19.1% compared to January 2020 — before the start of the pandemic. Last September, foot traffic was up 14% compared to September 2021, the data show.

The dollar store brands could see even more growth this year, according to Ethan Chernofsky, senior vice president of market at Placer.ai, a data analytics firm.

“If the two retailers continue to improve the quality of their fresh food while maintaining the low prices associated with their brands, there is a high chance it will bolster their value proposition with their existing consumer base and also pull in new customers from higher-priced retailers,” the Coresight report said.

Shoppers have been buying less expensive items – giving up beef in some cases – and buying fewer items for months, while even affluent consumers earning six-figure paychecks have said they are living paycheck to paycheck due to the higher cost of goods, The Post reported.

While Walmart remains the largest grocery retailer in the U.S., the dollar stores nevertheless “made some progress” against Walmart over the past year in the food and beverage categories, according to a pricing study by Gordon Haskett analyst Chuck Grom, comparing Walmart and the dollar stores.