Discount grocery stores are characterized by low prices with a high percentage of private label or own-label products, a simplified assortment and store layout, and minimalist customer service. Many of the world's leading discount grocery retailers originate from Germany, and have also become some of the major players in the U.S. discount market. In fact, the United States is a thriving market for this channel, being the second largest after Germany and is set to grow at a steady pace in the near future. The rising cost of living and restrictions on budgets, due to the growth in inflation rate in the U.S. in 2022, may be one reason behind the forecast growth of the discount grocery market. This can be seen in the shopping behavior of grocery shoppers; in the U.S., over one-third of respondents were switching to cheaper stores to cut back on spending.
Despite the rise of the two German discounters, local discounters have not yet pulled back, quite the contrary. Grocery Outlet, which thanks to its growing number of stores located in the region where the other two are not, the western U.S. states, has shown good growth in annual sales, at least through 2021. And the dollar store leader, Dollar General, whose impressive store count made it the leading retailer with the most stores in the United States, has allowed it to maintain fairly positive sales growth and still remains as one of the leading discount grocery stores in terms of sales.
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