Monday, November 30, 2015

Falling prices: Dollar stores now cheaper than Walmart

Deflation, or low-end store wars?

Falling prices: Dollar stores now cheaper than Walmart

The view inside a Family Dollar store. (Photo from
The view inside a Family Dollar store. (Photo from

The price of a shopping basket with 42 identical household, food, beverage and throwaway "consumable" items declined from October to January "at Dollar General, Famly Dollar and Wal-Mart locations in northern New Jersey," writes Charles Grom, New York-based retail analyst at Birmingham, Ala.-based Stern Agee.

At Family Dollar, Grom and his shopping team found the basket of items fell 3.4% in price compared to three months earlier, to $145.59. Dollar General cut prices 2.2%, Wal-Mart by 0.7%. The dollar stores cut food and beverage and household products the most; Walmart was relatively cheaper for paper products and other "consumables."

Both Family Dollar and Dollar General are now, on average, cheaper than Walmart -- a reversal from May 2013, when "Walmart was the clear pricing leader," with savings of nearly a nickel per dollar, Grom reports. By January, Family Dollar shoppers were saving more than a nickel for every $2 spent at Walmart, and Dollar General was slightly cheaper than the big-store chain. In short: "Walmart has conceded the 'price leader' crown to Family Dollar."

At chain drugstores, by contrast, prices are a lot higher: A basket of 33 common goods at both CVS and Walgreens priced more than 30% above Wal-Mart equivalents.

Grom stopped short of blaming deflation or an economic slowdown for low-end consumers: In a report to investors he said the dollar stores are slicing prices for their own competitive reasons.

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PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at, 215.854.5194, @PhillyJoeD. Read his blog posts at and his Inquirer columns at Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph at or 215 854 5194.

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