As Middle Class ‘Trades Down,’ Dollar Stores Trade Up

"The great thing at Dollar General is that we offer that value," CEO Todd Vasos said Thursday, on the company's Q1 earnings call. He was responding to a question from UBS's Michael Lasser, who asked about the contribution from "trade-down" customers, a polite euphemism for lower-middle class consumers "who may be facing some incremental economic stress," as Lasser put it. Vasos told Lasser the company's "core customers" are beginning to shop "more intentionally" at Dollar General and that the

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3 thoughts on “As Middle Class ‘Trades Down,’ Dollar Stores Trade Up”

Once again it looks look a barbell trade makes sense = long dollar stores plus LVMH. Leave the retailers in the middle out. If this is similar to 2009, avoid “aspirational” luxury brands as well.

H-Man, Dollar General and Tree are stores that mean you have to drive to get to a Walmart. This is the Walmart crowd that won’t drive due to gas prices. It does not bode well for low income retail stores.They will cut back as prices rise.

“Sure, the companies’ solid results and decent guidance were good news for investors, and I suppose it’s encouraging that Americans haven’t yet resorted to food banks.”

I live in the KC metro area. My local/regional food bank covers the metro a couple of larger cities in Eastern KS. Demand is up and it is hard to meet that demand. Last year they delivered well over 40 mil pounds of food and the number is growing this year.