New report looks at the grocery potential of dollar stores, consumer overestimation of organic food purchases

Consumers living near dollar stores could fuel expanded grocery selection in those outlets, a new report says.

Purdue University’s April Consumer Food Insights report polled 1,200 consumers across the U.S. on a variety of food behaviors, according to a news release.

The report looked at differences in food behaviors by food security status rather than demographics and included questions about organic purchases, consumer behavior and food selection at dollar stores.

Dollar store grocery potential

The survey found that just 11% of consumers who shop at dollar stores bought fresh fruits and vegetables in the past 30 days, compared with 39% of dollar store shoppers who purchased snack foods, 23% who purchased canned foods and 20% who purchased frozen foods.

“More than half of Americans have recently shopped at a dollar store,” Jayson Lusk, professor of agricultural economics at Purdue, said in the release. “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 survey found that 50% of all consumers polled said a full-service grocery selection at dollar stores would be a draw, the release said.

“Plus, nearly 60% of consumers say that they live within 10 minutes of a dollar store, which has potential for capitalizing on access issues,” Lusk said in the release.

The April survey found that total food spending is up 7% from this time last year, while consumers similarly estimate annual food inflation to be about 7%.

Organic halo

The report found that vegetables and fruits are the most popular organic items, but less than a third of consumers said they often or always choose organic. 

The survey found that just over 30% of consumers say they purchase organic vegetables and fruit “often or always.” However, since organic farmland represented 1% of total farmland in 2019 and organic produce makes up just 6% of overall food sales, the report said consumers are “likely overestimating” how often they purchase organic food.

“Since organics are not purchased that often, we can say that people are likely overstating how often they select these foods,” economist and report co-author Sam Polzin said in the release. “Since organics have one of the largest halos with regards to nutrition, naturalness and the environment, social desirability bias is probably a common factor contributing to this phenomenon.”

Food insecure

More than 40% of consumers surveyed reported they rely on food aid, and 80% report living “paycheck to paycheck” in their food purchasing, the report said.

“[Those consumers] also have a much more negative view toward their own diets, which we might expect would have a cumulative negative effect on overall well-being,” Polzin said in the release. “They eat at home more often, prefer generic brands, and aren’t buying more expensive products like wild-caught fish or organics as much.”