High inflation hasn’t only affected the middle-class, in fact, two of the country’s largest dollar-store chains are seeing wealthier consumers turn to them for lower-priced goods.
Dollar Tree and Dollar General both reported higher sales and profits in the most recent quarter, and it’s the wealthy that are spending their money there.
Todd Vasos, CEO of Dollar General, said on a call with analysts that the store saw a rise in higher-income households shopping there, “which we believe reflects more consumers choosing Dollar General as they seek value.”
In the second quarter, Dollar General’s revenue was $9.4 billion — a 9% increase from a year ago — while the retailer’s net profit also soared 6%.
Vasos pointed out that Dollar General saw signs its core customers are “shopping more intentionally and closer to need,” by making trade-offs of some food choices.
Dollar Tree’s CEO, Mike Witynski, said the majority of the chain’s new customers in the past year have been from households making $80,000 a year or more. He also said the store is seeing more customers use credit instead of cash, which points to customers feeling strained.