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Dollar Stores Want to Be Grocery Stores, But Cheaper

Dollar stores have added plenty of food—and alcohol—to their shelves in recent years to lure customers who are interested in more than disposable cups and paper goods. Offering speed, goods in smaller volume, and value, the strategy seems to be working. The addition of products, from milk and eggs to brand-name packaged goods such as Special K cereal and Hamburger Helper have resulted in rising food sales at chains such as Dollar General, Family Dollar, and Dollar Tree.

As more consumers see the dollar store as a legitimate place to shop for food, manufacturers—from such giants as General Mills, which recently started selling Fiber One products in the dollar outlets, to trendy startups like vegan mayo maker Hampton Creek—are vying with the chains’ more-profitable private brands for shelf space. To compete, manufacturers are adapting their products for dollar store consumers.