Dollar General has a particularly clear view into the pocketbooks of low-income Americans, given those shoppers are the discount retailer’s core customer base. And some are so financially pinched they can no longer afford basic necessities, the chain relayed on Thursday.
Years of escalating prices is squeezing those on the lower rungs of the income ladder, and Dollar General is not expecting much improvement this year, “particular for our core customer,” according to CEO Todd Vasos.
The warning comes amid mounting concerns that the U.S. economy is slowing down, with businesses and investors pointing to uncertainty stemming from the Trump administration’s disputes with trading partners.
“Their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation,” CEO Todd Vasos told analysts on Thursday in an earnings call. “Many of our customers report that only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities.”
The retailer, which tallied 2024 fiscal year sales of more than $40 billion, also reported a resurgence in a trend in which higher-income shoppers turn to frequenting discount stores.
“Some of these negative dynamics will naturally correct as confidence and the economy pick back up,” commented Neil Saunders of GlobalData. “The unfortunate thing here is that this does not look like it will happen anytime soon.”
Walmart recently painted a similar scenario, saying some of its customers are running out of cash before the end of the month and shifting to smaller package sizes in purchasing consumer goods.
Retailers have lately warned of softer consumer demand amid concerns that President Trump’s ongoing tariffs could propel prices higher.
Dick’s Sporting Goods on Tuesday offered a gloomy earnings outlook based less on its customer behavior than on the uncertainty of what’s ahead given the president’s trade wars. That followed weak guidance from others, including department store chain Kohl’s. Airlines have also cut earnings forecasts as corporations and consumers curb spending in the face of rising economic headwinds.
