It’s not Walmart. It’s not even Aldi. The new grocery low-price leader is – would you believe – Dollar General?

That’s not what Walmart would have you believe. The company trumpeted its price leadership at an investors conference last week, and the Wall Street Journal today headlined a Deutsche Bank price-comparison study that crowned Walmart the cheapest option. But while Walmart, and the Deutsche Bank study, had their eyes on traditional grocery competitors, Dollar General was apparently sneaking up from behind.

According to Kantar Retail’s second annual “opening price point survey” released last week, Dollar General beat Walmart’s overall prices by 18%. The survey compared items offered at big-box retailers Walmart and Target, Boston-based supermarket Stop & Shop, drug store Walgreens, and discount stores Dollar General, Family Dollar and Aldi. In a selection of products across the edible grocery, nonedible grocery and health and beauty categories, the study found that Dollar General had the lowest total price. Walmart was second, and Walgreens was highest priced, charging more than twice as much as Dollar General for the very same items.

Dollar General‘s basket price leadership at the opening price point level is impressive,” Drug Store News quoted a Kantar Retail executive as saying. And it’s not just Dollar General‘s prices, but its selection. Dollar stores have become much more competitive, as they offer more brand name products and edibles that allow them to be mentioned in the same breath as more traditional grocery retailers.


Deutsche Bank must not have gotten the memo. “It keeps getting tougher to compete with Wal-Mart,” the Wall Street Journal report on the study reads, “with new numbers out today showing the company is lowering its prices even as groceries, on average, are getting more expensive at the country’s big chains.” That study compared Walmart’s prices to those at Kroger, Safeway and Harris Teeter. Walmart’s prices decreased by 1.4% in the third quarter, making it an average of 17.4% cheaper than its grocery store competitors.

And Walmart is vowing to keep its prices low. Last week, the company announced that it would invest $6 billion to hold down prices over the next five years.

But if Walmart hasn’t exactly been keeping an eye on the actual low-price leader Dollar General, Dollar General has definitely been keeping its eye on Walmart. “We do a very good job of tracking where the big box operators are,” the company’s CEO Rick Dreiling said last month. “I could take a basket of items and give you a great comparison against anybody any day.” And for Dollar General, it’s not just about keeping prices low, but improving its image. “Back in 2008,” Dreiling noted, “23% of our customers viewed Dollar General as ‘not for me quality or image.’ Today that number is only 7%.”

Walmart does have one significant advantage over Dollar General, though, in the area of health and beauty. While Dollar General had lower prices on grocery items in the Kantar Retail study, Walmart had the lowest prices on health and beauty items. A shopper could save an additional 10% by shopping around – buying groceries at Dollar General, and health and beauty items at Walmart.

Oh, and there’s a study for that too. A Boston Globe article this past weekend cites a recent SymphonyIRI Group study that says 76% of Americans regularly visit at least five different stores for their grocery needs. Only 3% regularly visit only one or two. So as Walmart, Dollar General and others battle it out to be the ultimate low-price leader, the lowest prices of all could be obtained by simply shopping them all.

Comments are closed.

Privacy Policy
Disclosure Policy