Dollar stores force big brands to compete for your food dollars

Last week I bought a 13-ounce package of whole grain Primo pasta and a large can of Primo Spaghetti sauce for $2 at my local dollar store, Dollarama. At the grocery store, these two items together would have cost almost $3.

It's no wonder that major marketers are beginning to see $1 as the "magical" price that will entice consumers to buy their products. So says an article on USAToday.com by Theresa Howard.

Howard reports that spending in dollar stores, by customers earning $100,000 or more, rose 18% in the second half of 2008. On top of that, food prices for the 12 months ended April 30, are up 3.3%.

People see $1 as the definition of value, so the big brands are touting dollar deals to sell their products. Along with Kraft's $1 cheeseburger also mentioned in a NYTimes.com article, Wal-mart TV ads are promoting more than a dozen items as a "nutritious breakfast" for about $1 a person as an alternative to fast food.

In June, Unilever is set to distribute 25 million coupons offering discounts on the purchase of two boxes of Lipton Onion Soup mix. This is to promote Lipton Onion Burgers for 85 cents per serving.

Campbell wants to see what interest level there is for condensed soup selling for $1 instead of the usual $1.59. This will only apply to some of the soup varieties at selected outlets.

Let's hope the experiment encourages them to reduce prices permanently. I remember when a can of Cambell's chicken noodle or tomato soup cost 59 cents. A dollar is plenty to pay for a 10-ounce can of soup.