Dollar Channel Eyed for Continued Growth

SCOTTSDALE, Ariz. — The dollar channel will continue as a fast growing retail sector, and will compete with traditional retail not only for consumers, but also for the attention of suppliers.

Executives from Deloitte elaborated on the results of a recent consumer/industry study on the dollar channel during the FMI Midwinter event here, and they pointed to the high stakes involved.

"There's a significant prize here in the value consumer," said Rich Nanda, principal, Consumer Products, Deloitte Consulting. "And who wins is up in the air."

He said CPG suppliers are increasing their investment in the dollar channel, and that focus might be bad news for traditional retailers.

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"CPG companies are increasing resources in sales to interact with those customers, as well as with insights to win with those customers," he said. "Some are doing tailored product offerings and marketing messages."

He said, however, that CPG suppliers continue to struggle with "channel conflict."

"There is pressure from other trading partners," he said.  "New price points and offerings for dollar have implications for traditional retail. So traditional retailers will ask that those additional offerings be made available to them as well."

Pat Conroy, vice chairman and U.S. consumer products leader, Deloitte, also participated in the presentation.

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