Dollar General maintains opening price point leadership in Kantar study

Boston --Dollar General maintains its overall opening price point leadership position in Kantar Retail’s fourth annual opening price point (OPP) study. For the third consecutive year, Dollar General‘s overall basket was the least expensive, edging out Walmart supercenter’s basket by 2.5%, representing a widening of the gap between the two in the 2013 study.



In addition, Dollar General was also able to widen its price gap with rival Family Dollar. In a change from previous years, the non-edible basket is what drove Dollar General’s overall basket lead over Walmart, as Walmart’s edible grocery and HBA sub-baskets were less expensive than at Dollar General this year.



According to Mike Paglia, director of retail insights for Kantar Retail and contributor to the study, “this year’s results indicate that Dollar General is leveraging non-edible categories to implement its OPP value message at the basket level, which is consistent with the retailer’s stated initiatives.”



Although Dollar General’s overall basket was the cheapest, OPP leadership differed for each sub-basket: Aldi was the cheapest in edible; Dollar General took the lead in non-edible; and Walmart posted the cheapest HBA sub-basket. Target’s total OPP basket was the most expensive of the competitors assessed.



Study results indicate that promotional pricing had a substantial impact on Dollar General’s OPP price leadership. Walmart’s position was aided by its low-OPP, “88cent” initiative while Aldi’s “food first” strategy was demonstrated by its considerable OPP leadership in the edible sub-basket.



“Taken together, the low-income shopper has an array of credible options when it comes to selecting outlets that meet her basket requirements,” Paglia noted. “Given the variability among retailers in leading each of the three sub-baskets, shoppers appear best served by cherry picking multiple retailers rather than leveraging a one-stop shop. Such a routine favors the shopper who is willing to compare prices on a regular basis and swap destinations for a particular item as necessary.



“Retailers who are able to provide both actual and perceived price leadership, in part through opening price points, will win wallet share with this large shopper segment.”



In this year’s study, Kantar Retail selected 21 categories across the edible grocery, non-edible grocery, and HBA segments. All data was collected in southeastern Massachusetts in Sept. 2014. For each retailer, Kantar Retail assessed the lowest price point available to the shopper in that category regardless of brand or pack size (excluding trial sizes) so that the budget-strapped shopper could minimally meet her purchase requirements across categories.