Dollar stores the fastest growing retail channel for U.S. candy - IRI
The channel, which includes stores such as Dollar General and Family Dollar, accounted for just 3% of U.S. candy sales in 2014, but it was the fastest growing channel for U.S. candy at +4.8%.
The value proposition
"The dollar channel is growing and candy makers should focus on getting value products right,” Larry Levin, executive vice president of industry insights at IRI, told ConfectioneryNews.
"It's the value quotient. People still want to indulge, but maybe they can't all afford to buy it at a regular retailer."
All channels, except club stores, grew candy sales in the U.S. in 2014. Mass market retail, which includes stores such as Target, accounted for the highest proportion of candy sales (27%) and was the second fastest growing channel (+3.7%) behind dollar stores.
"Dollar has become a big channel for a lot of categories whether it's beauty or frozen, candy's just really riding along,” said Levin.
2014 U.S. candy sales versus prior year
Mass - +3.7%
Convenience - +2.8%
Food - +1.9%
Drug - +2.6%
Club - -1.8%
Dollar - +4.8%
Source: IRI
Dollar stores were also leading growth in the U.S. snacks category and were up +8.5% on last year.
Tailoring mix for dollar stores
"If you are thinking about dollar, just make sure you have the right assortment of products. There's some logistics issues because you can't have a lot of product in the backroom, so you've got to make sure you’re stocking in the right way,” said Levin.
The analyst continued: "Understand the consumers that are coming in there - what are the products they would buy and think are there co-merchandizing opportunities, because we know a lot of people go to dollar stores to buy greeting cards, so how do you get them down the candy aisle when they're out there buying greeting cards as well?"
