Dollar General is gaining customers from higher income groups amid inflation

Dollar General ( DG ) is seeing customers above its “core” income bracket more often.

CEO Jeff Owen said the retail chain is seeing strong consumer demand and gaining market share as Americans look to pinch pennies amid inflation. During an earnings call with analysts, he said, “Customers and income groups above our core customers [are] shop with us at an increasing rate.”

Dollar General prides itself on low everyday prices and a price point of $1 or less (a likely dig at competitor Dollar Tree ( DLTR ), which raised its prices to $1.25 on most items). As economic uncertainty continues, Owen believes the company will become “increasingly important” to consumers in the next year.

“We’re an all-weather brand, and we’ve shown over the past three decades how we can serve this customer in any economic environment.”

So who is the Dollar General customer? Based on digital capabilities, Owen explained who “she” is.

“She’s still employed … It’s the single most important factor in her financial health … [But] We see that she is worse off financially, and this is primarily due to food inflation.”

Food inflation hit consumers hard in 2022. Last month, grocery inflation eased for the sixth consecutive month after peaks in August 2022, but it is still up 0.3% from January 2023 and up 10.2% from last year, causing consumers to change the way they act.

“She relies more on savings, credit cards and also borrows money, frankly, from friends… What we see in the shopping behavior is that it translates into our customer coming more often, she buys fewer items occasionally . . .We’re also seeing her lean into private label, and we’re seeing her shift her shopping more to consumer goods.”

Dollar General has invested in its DG Fresh Facilities to increase self-distribution of frozen and refrigerated products such as dairy, deli and frozen. As of Q4, it now has 12 facilities delivering perishables to more than 19,000 locations. By the end of 2022, Dollar General offered fresh produce in more than 3,200 stores and plans to expand the offering to more than 5,000 stores by the end of 2023.

VALLEJO, CALIFORNIA – MARCH 17: A customer shops at a Dollar General store on March 17, 2022 in Vallejo, California. Dollar General announced fourth quarter earnings of $2.57 per share. per share, which just beat analysts’ expectations of $2.56 per share. The retailer had net income of $597.4 million, down from $642.7 million a year ago. (Photo by Justin Sullivan/Getty Images)

Despite this influx of shoppers, the retail chain missed estimates overall, posting a 5.7% increase in same-store sales, slightly lower than estimates of 6.23% in Q4 2022 results. Revenue also missed $10.20 billion, lower than estimates of $10.24 billion. Earnings per stock also fell, $2.96 a share. share compared to estimates of $2.99 ​​per share. Year-to-date shares of Dollar General are down nearly 13%.

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at

Follow Yahoo Finance on Twitter, Instagram, Youtube, Facebook, Flipboardand LinkedIn.

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedInand Youtube

Leave a Reply

Scroll to Top
%d bloggers like this: