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Inflation weary consumers turn to Dollar General store brands

Although inflation’s pace has slowed since the middle of 2022, the cost of everyday essentials continues to rise.

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GOODLETTSVILLE, Tenn. — Although inflation’s pace has slowed since the middle of 2022, the cost of everyday essentials continues to rise. At Dollar General, more shoppers are experimenting with store brands as they seek ways to lessen the strain on their family budgets, says Jackie Li, senior vice president, private brands and global sourcing at Dollar General.

Store brands play a key role in strategic initiatives aimed at providing Dollar General customers with value and convenience, Li says, and in advancing the company’s mission of “serving others.”

“At Dollar General we serve a diverse customer base ranging in demographic backgrounds and know that amid the inflationary climate of the past two years, customers are finding it increasingly challenging to make ends meet,” he says. “Our private brands prioritize offering affordable, high-quality items.”

Approximately 80% of DG stores serve communities of 20,000 or fewer people, particularly in rural areas where residents rely on the retailer for their everyday and household essentials, which increasingly includes food.

Dollar General’s “food first” initiative is a broad strategy to provide customers with increased healthier food options. Consumables recently accounted for about 80% of total sales at DG, and the company’s research suggests that it offers a price advantage over most food and drug retailers, with prices that are competitive with even the largest discount retailers. To capitalize on the demand, Dollar General is rolling out larger store formats with significantly increased cooler capacity, as well as the ability to add fresh produce and meat. Notably, the company reported that it began 2024 with more individual points of produce distribution than any other U.S. mass retailer or grocer.

Dollar General has approximately 40 private brands, Li says, evenly divided between consumables and nonconsumables. Brands include DG Health (over-the-counter remedies), Clover Valley (a multibillion-dollar brand spread across candy, snacks, food and perishables), True Living (household essentials), Forever Pals (pet food and supplies), OhGood! (vitamins and dietary supplements) and Rexel (health and wellness products).

Li says that while the price differential is compelling many DG shoppers to stray from their trusted national brands, younger shoppers have less brand loyalty to lose.

“A lot of the younger Millennial shoppers coming into the market are not brand loyalists. While they like national brands, they are flexible and open to trying out different options that retailers offer,” he says. “Especially when you provide them with something new from an innovation perspective at the right price, they see that as a value private labels can bring.”

In his role, Li oversees Dollar General’s private label business, managing all aspects including merchandising, sales, branding, product development, and more. This year Li was inducted into the Private Label Hall of Fame, in the retailer private brand innovator category.

The Private Label Hall of Fame was created in 2006 by the Private Label Manufacturers Association to recognize professionals making significant contributions to the growth and development of store brands. Inductees serve as role models for current and future generations of professionals in the private brand business, Peggy Davies, PLMA’s president, said in March in announcing Li’s induction.

“Jackie’s customer-centric approach allows him to think beyond the bottom line and make genuine connections between DG’s business and customers,” asserts Emily Taylor, executive vice president and chief merchandising officer at Dollar General. “Jackie and his team utilize people, processes, innovation and technology to meet customers’ unique and diverse needs, ensuring each private brand product is relevant while truly exhibiting DG’s mission of serving others.”

Private label merchandise continued to take share from national brands in 2023, according to a recent PLMA report on store brands. Store brand sales increased 4.7% over the previous year to a record $236.3 billion, the association says in its “2024 Private Label Report,” which cites PLMA/Circana Unify+ market data.

Private brands accounted for more than one-third of consumer spending for core pantry items, including eggs, cooking oils, salty snacks, refrigerated meats, fresh breads and coffee, according to Circana. Store brands and national brands each notched growth in core pantry sales in 2023, but the increase in store brands (3.9%) outpaced growth in sales of name-brand products (3.2%).

In looking at the future of private brands, Li says he intends to sustain the momentum with new digital and in-store marketing programs promoting Dollar General’s brands.

“I believe there is a lack of awareness of our private brand offerings at Dollar General and a need for trial. So, we are going to be laser focused in promoting and talking about our private brands, which are national brand equivalent or better than national brand. We plan to accomplish this through in store signage, digital media, Web landing pages and creating that trust factor with our shoppers, anchored by the quality and value that our private brands offer.”

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