Deloitte: CPG companies not keeping up with explosive growth of dollar channel

NEW YORK — Only 58% of consumer packaged goods executives view dollar stores as a strategic channel, according to Deloitte’s new "Dollar Store Strategies for National Brands" study. Deloitte advises that CPG companies may not be keeping pace with the explosive growth of the $56 billion dollar store industry, and should act now to maximize market share and profits.

In other survey highlights:

  • Three-quarters (75%) of CPG executives surveyed expect dollar stores to continue to expand their geographic presence, and 62% forecast sales at their company’s dollar channel to increase in the next three years; and

  • Only half (51%) of all CPG executives surveyed believe their companies have increased investment in sales capabilities related to the dollar channel over the last three years.

The top five operational challenges CPG companies surveyed face while dealing with the dollar channel include:

  • Supply chain, distribution and operations (29%);

  • Brand, product strategy and innovation (24%);

  • Channel conflicts (12%);

  • Margin management (12%); and

  • Pricing and trade promotions (12%).

Click here for the full report.

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