Has Dollar General become posh?
As inflation continues to put pressure on consumers across income brackets in the U.S., six-figure earners are feeling less like they are high income, according to Dollar General CEO Todd Vasos. Per a report from The Street, Vasos discussed the company’s shifting consumer base at the recent Goldman Sachs Global Consumer and Retail conference.
“The interesting thing with this economy, because of the other sustained headwinds of inflation over the years that have passed, [is that] even that middle to upper middle is acting more like a lower-income shopper these days,” Vasos said.
A CNBC/SurveyMonkey survey from this summer found that 41% for those making between $100,000 and $249,999 in the U.S. were living paycheck to paycheck. Consumers face challenges like heavy student debt, stagnating wages, inflation that’s lingered since the COVID-19 pandemic, the Federal Reserve Bank’s move this month to raise interest rates (making it more expensive to borrow money) and the spike in gas prices this year due in part to the U.S. engaging in military conflict in Iran.
CNN poll results released Wednesday showed that 73% of people disapprove of the way President Donald Trump is handling the economy. These results came after Trump administration Secretary of Agriculture Brooke Rollins recommended that Americans eat chicken if they were finding beef to be too expensive.
In this economic landscape, The Street noted that “a growing number of CEOs and industry insiders, from retailers as varied as Walmart and ThredUp, have said they’re seeing shifts in the behavior of consumers earning $100,000 a year or more.”
At Dollar General, a chain that offers discount prices on everyday goods like soda, laundry detergent and toilet paper, Vasos said this August that consumers have been “stretched” and “distressed.”
He wants his business to be a place stressed out consumers can turn to.
“We’re very convenient, right?” Vasos said at the Goldman Sachs event, per The Street. “We’re close –we’re within 5 miles of 75% of the U.S. population. Many of our customers ride a bike to our stores or walk to our stores. That’s how close they are.”
Once these consumers learn more about shopping at Dollar General, they might keep coming back. Company COO Emily Taylor said that consumers who aren’t all that familiar with Dollar General are often surprised at the value they can find there.
“They’re surprised when they shop us in terms of the breadth of assortment that we have available,” she explained. “And those things stick long after maybe the economic cycle changes.”
If readers are worried that an influx of six figure-earners might mean that Dollar General prices are going up, they don’t have to panic. Vasos actually said that the chain is “placing a renewed focus on keeping prices low,” The Street reported
“The one thing that sets Dollar General apart and now more than ever is that $1 price point,” said Vasos. “Having 2,000 items at or below $1 is very meaningful for the consumer, always has, but especially in this environment.”
This Thursday, Dollar General also announced an expanded holiday assortment “highlighted by a dedicated shelf featuring toys priced at $5 and under,” to help consumers find affordable gifts this holiday season.
