Price dichotomy

Over the past decade, the number of gourmet supermarkets, dollar stores and discount supermarkets grew by more than 60% in the US. That is to the detriment of conventional supermarkets whose numbers shrunk by 3%. In other words, growth was concentrated at both ends of the price spectrum.

Gourmet supermarkets tend to sell higher-priced but higher-quality products that are often unique. They mainly serve higher-income (sub-)urban consumers. Discount supermarkets compete on lower relative prices while discount stores provide smaller quantities at lower absolute prices. Both tend to serve cost-conscious and low-income consumers, so they therefore, experience above-average growth during times of economic hardship.

Source: Progressive Grocer industry organization, public filings and PJ Solomon estimates, July 2021.