Discount retailer Dollar General beat expectations this quarter, reporting $10.44 billion in sales for the period ending May 2, up from $9.91 billion in the same quarter last year. The increase came amid economic uncertainty, which is driving even more affluent shoppers toward discount chains.
What is Dollar General seeing when it comes to new shoppers?
During an earnings call Tuesday, June 3, CEO Todd Vasos told analysts the quarter’s growth could be attributed to wealthy shoppers.
“We have seen increased growth from both middle and higher income customers,” Vasos said. “Our data shows that new customers this year are making more trips and spending more with us compared to new customers from last year.“
Who is the typical Dollar General shopper?
Dollar General’s core customer base historically earns less than $40,000 annually, according to CNN. The company operates more than 20,000 stores across the U.S., and has long been considered an indicator for lower- and middle-income consumer behavior.
In addition to new, more affluent customers, Dollar General says sales also improved among its traditional base of low-income shoppers seeking value amid inflation.
Why is this important?
In March, Vasos said shoppers were cutting back to basic needs due to higher prices, noting many reported their financial situations had worsened over the previous year.
Now, same-store sales, a key retail metric, rose 2.4% in Q1, beating projections of 1.5% according to The Wall Street Journal. The company expects this momentum to continue, even while bracing for possible price hikes tied to new tariffs.
How are Trump’s tariffs factoring into this?
President Donald Trump’s new tariffs, including an additional 50% rate on imported steel and aluminum, are already weighing on retailers. Dollar General said its revised sales forecast now expects growth of up to 4.7% by early 2026, higher than its previous range of 3.4% to 4.4%. Still, the chain warned that tariffs could force price increases on certain goods.
Vasos told CNN that tariffs might raise prices “as a last resort,” but noted that the company is working to minimize any impact.
The company’s outlook assumes the current tariff rates remain unchanged through at least mid-August but said it is prepared to adjust if trade tensions escalate further.
How are shoppers feeling about the economy?
Consumer confidence rose in May for the first time in six months, according to The Conference Board, following the May 12 U.S.-China trade deal, which reduced tariffs on Chinese goods to 30% and set a 90-day negotiation window.
However, those talks have since stalled. On Wednesday, Trump took to Truth Social and wrote that China’s President Xi Jinping is “very tough” and “extremely hard to make a deal with.”
