People are feeling the weight of inflation as prices for necessary goods and services continue to climb.
Several discount stores are reporting sales increases as consumers flock to the retailers.
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Dollar Tree, which owns Family Dollar, reported a net sales increase of 6.5% during the first fiscal quarter in 2022, while Dollar General similarly saw an increase of 4.2%.
On a recent earnings call, Dollar General CEO Todd Vasos said, “We’re already starting to see that our core customers start to shop more intentionally, and we’re starting to see that next tier of customers start to shop with us a little bit more as well.”
“Matter of fact, when you look at the COVID customer, I would call it, the one that we attracted and now have retained since COVID, it is still running at or slightly above where we thought we would be right now, and that’s a little higher-end consumer,” he added. “Shopping patterns are definitely changing, and we’re seeing it happen right before our eyes.”
Dollar Tree, which recently raised its base price to $1.25, slightly deviating from its namesake, said the move hasn’t deterred consumers. President and CEO Michael Witynski noted that it actually contributed to “both sales and margin improvements.”
“When the customer’s stressed more than ever, highest inflation in four decades, they’re getting pressure on their rents, on their fuel for their cars, on their heating bills, and on their food bills, they’re going to come to Dollar Tree and Family Dollar now more than ever because of the great value that we have,” Witynski said on a March call.
The discount chain’s jump is also a record for the company.
“The Dollar Tree banner delivered its strongest quarter in company history. Among the highlights: an 11.2% comp, the best quarterly comp performance in more than 20 years, which is including our largest sales day ever, which was the Saturday before Easter,” Witynski reported on a May call.
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Grocery Outlet President R.J. Sheedy said on a May earnings call that “consumers are clearly feeling pinched by inflation and looking to stretch their grocery dollar.” The discount grocer reported a 10.5% increase in net sales in the first fiscal quarter.
“We have seen more new customers shopping us,” he added.
