• by Sarah Mahoney  @mahoney_sarah, October 27, 2013

When it comes to low prices, Dollar General has beaten out Walmart for the second year in a row, offering more proof that dollar stores are becoming an increasingly mainstream shopping alternative. Family Dollar came in third in Kantar Retail's analysis, with Target ranking most expensive in the six-store survey.

This is the third year that Kantar Retail has ranked baskets, this year selecting 21 categories across the edible grocery, non-edible grocery, and HBA segments. 

Affluent shoppers are the fastest-growing users of dollar stores, says Mike Paglia, principal analyst with Kantar, “but they still represent the smallest segment. More than two-thirds of dollar store shoppers earn $50,000 or less, and this core group is used to being financially constrained. They already have a set of coping behaviors, so there is a fair amount of resiliency,” he tells Marketing Daily. “They know how to navigate this climate, and they stick to what works.”

While these consumers are also heavy Walmart shoppers, he explains, the rapid geographical expansion of dollar stores means they are often more convenient. “More shoppers are going to Walmart for the majority of the basket, and then to dollar store for one or two items, and that trend is where the growth is.”

Paglia says this year’s survey revealed a surprisingly narrow gap between competitors, with Dollar General winning by just 12 cents, with a price of $28.70. (Last year, its prices were 18% lower.) And third-place Family Dollar ($30.81) also narrowed the gap between it and Walmart, followed by Stop & Shop ($34.05), Aldi ($37.89) and Target, the most expensive store in the six-store survey, with a basket of $42.49. Ranked by the non-edible basket, Walmart came in first.