The study compared pricing at Dollar General, Family Dollar and Walmart following Family Dollar’s recent announcement that it plans to invest $50 million in pricing improvements across 1,000 stock keeping units (SKUs) in an effort to return to its everyday low prices.
Analysts filled a basket with forty-two SKUs to check prices–as they had in a similar study one month prior–and found that the overall price of the items fell by 0.3% at Dollar General and 0.4% at Family Dollar, and increased by 0.5% at Walmart driven by higher prices in food.
Based on the recent price checks, Dollar General emerged as “the new price leader” with the overall basket price coming in about 100 basis points lower than Family Dollar and sixty points lower than Walmart.
The price gap relative to Walmart was owed mostly to the household product category where it is priced at a 6.1% discount. Based on the survey basket, Dollar General came out lower than Family Dollar in multiple categories. Walmart, however, did maintain a 6.6% price advantage, on average, in the food-and-beverage category, compared to the two dollar stores, according to the study.
“While list-price adjustments did finally flow through our Family Dollar basket this time around, the overall basket at Dollar General (DG) fell by a comparable amount, helping Dollar General maintain its price lead,” the study noted.
The study found some list price adjustments at Family Dollar for the first time since its price-investment program announcement. Analysts compared Dollar General and Family Dollar SKUs head-to-head and found that 31 of the 42 items in the basket (71 percent) were priced evenly at the two discount stores, with Dollar General holding the low-price advantage on nine of the remaining 11 items.
“This convergence toward evenly priced items is consistent with the fact that in the list price investments mentioned above, we noticed Family Dollar decreasing prices to the level where Dollar General was,” according to the study.