A $100,000 salary is no longer insulating American households from the hunt for bargains, and Dollar General says it is seeing the shift firsthand.
At the Goldman Sachs Global Consumer and Retail Conference, Dollar General CEO Todd Vasos said shoppers who once would have been considered solidly upper-middle income are behaving more like the chain’s traditional lower-income customer. Rising costs for fuel, insurance, food, utilities and other essentials are forcing households to rethink where and how often they shop.
The erosion in purchasing power has been massive since the pandemic-era inflation surge. Even households earning six figures are reporting that their salaries do not stretch as far as they once did.
Vasos said Dollar General’s core customers, which are generally households earning below $45,000 a year, tend to change their behavior when gasoline reaches around $4 a gallon. They shop closer to home, make more frequent trips and purchase less each time.
Now, he says, higher-income shoppers are starting to behave in similar ways.
Higher-Income Shoppers Are Trading Down
That shift could work in Dollar General’s favor. The company is positioned around low prices, smaller store formats and locations that are often closer to customers than larger supermarkets or big-box retailers. That becomes particularly attractive when consumers are trying to reduce both grocery bills and fuel expenses.
It is also part of a trend in US retail. Walmart previously said it is attracting more higher-income customers as households across income groups become more focused on value.
Dollar General’s latest results suggest that demand for discount retail is very healthy. The company reported second-quarter net sales of $11.3 billion, up 5.2% from a year earlier, while same-store sales increased 3.5%. Customer traffic rose 2%, and diluted earnings per share climbed 33.3% to $2.48.
(Source: BusinessWire)
The company also raised its full-year earnings outlook to between $7.80 and $8.00 per share.
Dollar General’s stock nevertheless is still under pressure. DG shares closed at $121.91 on Sept. 21, down about 0.4% on the day. The stock is also well below its 52-week high of roughly $158, which suggests that investors are still weighing the benefits of stronger value-driven demand against broader consumer and cost pressures.
Dollar General stock price (Source: CoinCodex)
The most important factor may be employment. Vasos said consumers have stayed resilient largely because they are still working. This allows households to continue adapting to higher prices.
For Dollar General, the economic squeeze could create an unusual growth opportunity. The company is no longer competing only for lower-income shoppers. Americans earning $100,000 or more are also walking through its doors.
