- Walmart national branded consumables prices are 4.4% less than Dollar General
- Black people spend nearly $830 million a year on detergent
Walmart (WMT -1.01%) is gearing up for another battle to win over low-end consumers through a new pricing strategy. The front lines of this war will play out in minority communities across the country, as they battle chains like Big Lots (BIG -0.24%), Dollar General (DG +0.70%) and Family Dollar. Just how valuable is the black consumer’s dollar for the budget friendly chains Walmart is trying to dethrone?
Why This Matters: When it comes to spending power African Americans make up 14% of the U.S. population but have outsized influence in this arena. Financial firm Raymond James put out a note highlighting the price impact Walmart has on other discount chains, which happen to have a large black shopper demographic. “Walmart pricing for national branded consumables, which includes laundry detergent and cereal is now 4.4% lower compared to Dollar General and 6.5% below Family Dollar,” the note said.
If we look at the power of the black dollar across these same consumables, black people spend nearly $830 million a year on detergent and more than $573 million on personal soap and bath needs, according to Nielsen. It’s not just low income shoppers that frequent these dollar stores. Customers with household incomes of more than $70,000 claim they also shop at dollar store chains.
Situational Awareness: Dollar stores remain profitable and tend to thrive in areas of low-income earners where Walmart is vying for a larger market share. In general the retail sector has been hit hard with most companies facing declining stock prices. Walmart shares are down 12% for the year so far, while Big Lots shares are down nearly 24% for the same period and Dollar Tree (DLTR -0.05%) is down 9%. It would seem as though the black retail dollar is going to become more sought after for all of these stores as they try to push their stock prices higher.
CBx Vibe: “Cut It” O.T. Genasis
