In her song “Good Graces,” pop singer Sabrina Carpenter declares that she will lose interest if her love interest does not treat her right. “Boy, it’s not that complicated / You should stay in my good graces / Or I’ll switch it up like that, so fast / ‘Cause no one’s more amazing at turning loving into hatred,” Carpenter sings.

Similarly, the drug and dollar stores channel is working to stay in the good graces of consumers by offering deals and discounts on beverage products.

In a September 2024 report titled “Drug Store – U.S. – 2024,” Diana Smith, associate director and client advisor, retail and eCommerce at Chicago-based Mintel, delves into the drug store channel.

“The U.S. economy has shown resilience, with inflation easing to 2.9% as of July 2024 and low unemployment rates,” Smith says in the report. “However, consumer concerns about inflation continue to influence spending behaviors, pushing them towards store brands and lower-cost retailers.”

Smith shares that health and wellness remains important to consumers.

“Consumers are increasingly prioritizing holistic health, which includes physical and mental wellness,” she states in the report. “Preventative care and personalized health solutions are becoming more significant, presenting opportunities for drug stores to expand their health and wellness services.”

Technological integration also has impacted drug stores.

“Mobile commerce is a significant growth driver, with many consumers using mobile devices for shopping and health management,” Smith says in the report. “Drug stores need to enhance their online and mobile shopping experiences to remain competitive.”

The report highlights a few consumer desires.

“Consumers seek value-aligned brands and economical health solutions amid rising living costs,” she says in the report. “They increasingly opt for private labels, with 66% believing these store brands match the quality of name brands, reflecting a strong shift towards cost-effectiveness.”

The report notes that consumers are focused on their health, and specifically looking for holistic ways to manage their health. Additionally, convenience is important.

“Convenience drives consumer choices, with a trend towards online and hybrid shopping at drug stores,” Smith says in the report. “Consumers value flexible options like home delivery, in-store pickup and mobile shopping, enhancing accessibility and ease of purchase.”

Drug stores should focus on expanding their private label brands, the report adds, with a focus on quality, variety and sustainability.

“This strategy can attract price-sensitive consumers and differentiate their offerings from competitors,” she says in the report.

The report also suggests that drug stores should leverage loyalty programs.

“Utilizing loyalty programs can help retain customers and encourage repeat business,” Smith says in the report. “Offering personalized rewards and discounts can enhance customer engagement and loyalty.”

Enhancing mobile and online shopping experiences is another opportunity the Mintel expert shares in the report.

“Investing in mobile and online shopping platforms is essential for attracting and retaining tech-savvy consumers,” Smith states in the report. “Enhancing these experiences can improve customer satisfaction and drive sales. Integrating AI and telehealth services can also streamline operations and improve customer experiences.”

The report notes that the drug store sector is “poised for steady growth amid post-pandemic fluctuations and competitive pressures,” with the growth rate expected to decelerate. The market size in 2024 reached $384 billion, marking 33% growth since 2019, the report adds.

Growth in 2024 reached 5.4%, which is slightly below the average rate of growth from 2019 to 2023. This is expected as the industry normalizes, the report notes. Long-term growth is expected to reach 24% between 2024 and 2029, its adds.

Private label growth and innovation also is expected within the channel this year and next.

“The sector will expand by 24% with an average annual growth rate of 4.4%,” Smith says in the report. “Drug stores will focus on innovating private label offerings, including pricing and sustainable packaging, to attract cost-conscious consumers.”

Opting for private brands

As consumers increasingly are searching for ways to save, they are choosing private brands over national brands and that is resonating within the dollar chain retail market.

Goodlettsville, Tenn.-based Dollar General recently revealed that it retails more than 3,200 consumable private brand products that are backed by the company’s 100% satisfaction guarantee. Its private brands “offer highly consumable national brand equivalent and alternative products,” including the company’s Clover Valley brand of food and beverages, it says.

“As shoppers seek value and quality, we continually listen to customer feedback to identify opportunity gaps,” said Emily Taylor, executive vice president and chief merchandising officer for Dollar General, in a statement. “With more than half of our customers’ baskets having at least one private brand in them, we are proud to make significant investments in our private brands, bringing even more on-trend products and pantry staples to shelves.”

Clover Valley is Dollar General’s largest brand by sales, the company shared. For fiscal 2023, the brand achieved more than $2.3 billion in retail sales, eclipsing all other brands carried at Dollar General, according to the company. Clover Valley currently offers more than 600 items.

For Q1 2025, Dollar General plans to add approximately 100 new private brand products, with more than half falling under the Clover Valley name, it says. This includes beverage products like caramel and vanilla coffee enhancer syrups and 100% white grape peach juice.

“Our customers can’t afford to make a mistake when shopping,” said Angela Martin, vice president of consumer insights and branding at Dollar General, in a statement. “They need the value that our private brands offer, but with the assurance that the products will meet or exceed their quality expectations. Customer’s don’t want to feel like they are settling.”

To further Dollar General’s everyday values, it launched weekly deals on 2,000 or more products last fall. These deals come in the form of digital coupons, cash back offers and instant savings, representing approximately 20-25% of the total products in the store, the company notes.

The campaign educates shoppers on the Dollar General app to surface the most savings through deal clipping capabilities, highlighting the company’s brands through its ‘Switch to Save’ callouts that provide customers with added opportunities to maximize their budget.

Regardless of what deals drug and dollar stores offer, they will have to be flexible to keep consumers interested and meet the ever-changing needs of consumers.