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Stagnant Wages, Household Changes Favor Discounters, C-Stores

Small stores will grow considerably faster than supermarkets through 2024
dollar general
Photograph: Shutterstock

Discount and convenience stores in the U.S. are projected to grow faster than all other offline retail channels over the next five years, reflecting consumers' increased focus on price and speed, even if it means more limited assortment, according to an analysis from e-commerce insights company Edge by Ascential.

Nonfood discount, food discount and convenience stores are all projected for annual growth rates above 5%, whereas all other offline retailers, aside from membership club stores, are projected at annual growth rates of 3% or below. Convenience stores are projected for the highest growth at 5.4%, with discount and nonfood discount stores projected at 5.3% and 5%, respectively.

Even if unemployment continues to stay near historic lows, the study suggest that stagnant wages for many workers place an increased emphasis on value.

"What we're seeing offline is similar to what we're seeing online," said David Gordon, research director for Edge by Ascential. "There's an increasing emphasis on low cost and convenience. You can see it through the lens of Amazon, and it will continue to play out online in similar ways."

Moreover, the trend may be influenced by the continued expansion and growth of discounters and the variety they offer to customers. Discounter Aldi is expected to open 100 new locations, while Dollar General has continued to expand with hundreds of stores and new locations adding produce and fresh foods. According to the report, there is also an expected net increase of 160 Dollar Tree and Family Dollar stores. 

Food discount stores, in particular, are projected to continue gaining overall share, increasing to 9.7% of food sales in 2024, from 8.8% today and 7.4% in 2014.

Convenience stores will continue to thrive due to urbanization, declining household sizes and preferences for smaller shopping missions, the study said. Discount stores are also seeking to future-proof their share, with many partnering with online delivery intermediaries. 

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