KANSAS CITY — The dollar store retail channel is expanding in the United States and has the potential to capture more consumer food expenditure dollars. Consumers continuing to seek better value are, in part, fueling dollar store growth and creating greater opportunities for consumer packaged goods manufacturers supplying the channel.

Foot traffic data from the location analytics company Placer.ai shows traffic growth at discount and dollar stores consistently outpacing alternative channels, including grocery, drug and mass merchandisers. Three brands dominate the category — Dollar General, Dollar Tree and Five Below — and by January of this year Dollar Tree and Five Below saw foot traffic increase year over year 10% and 18%, respectively.

Dollar General’s foot traffic decreased slightly but was above other retail channels like mass, grocery and convenience, according to Placer.ai. The chain is the channel’s largest with more than $37 billion in annual sales, more than 19,000 stores nationwide and plans to open more than 1,000 in 2023.

A consumer survey by ChaseDesign, a company that evaluates what consumers are buying at retail and consults with retailers on creating more effective store experiences, found grocery is the leading category shopped in dollar stores, and consumers want greater selection. Specifically, the ChaseDesign survey found 51% of dollar store shoppers want more fresh and frozen food, and 47% want more national brands.

The survey also found 72% of shoppers identified organization, navigation and cleanliness as the leading reasons they find shopping at dollar stores to be a challenge. Consumers venturing into the outlets also tend to be making fill-in and immediate need trips versus stocking up, with the typical transaction being less than $25.

Purdue University’s Center for Food Demand Analysis and Sustainability publishes its Consumer Food Insights report monthly, and in April researchers included questions about consumer behavior at dollar stores for the first time in its survey of 1,200 consumers.

“More than half of Americans have recently shopped at a dollar store,” said Jayson Lusk, distinguished professor of agricultural economics at Purdue, who leads the center. “When it comes to food, many of these purchases are snack items. If consumers do pick up more food at a dollar store, it makes sense that people typically buy canned or frozen foods since these are the easiest options for dollar stores to stock.”

The top five product categories currently purchased at dollar stores, according to Purdue’s April “Consumer Food Insights” report, are snack foods, candy, beverages, sweet foods and canned foods. While only a small percentage of consumers shop for other groceries at dollar stores, there could be a market for an expanded food selection since 50% of those surveyed by Purdue reported a full-service grocery would be a draw, the report said.

Greater product selection and resolving the pain points identified by the ChaseDesign survey — notably store organization and a focus beyond serving the immediate needs of consumers — have the potential to further accelerate dollar store channel growth. Consumers have demonstrated a willingness to patronize dollar stores, and manufacturers open to collaborating with store operators and implementing solutions stand to gain from that growth.