The financial condition of low-income Americans has worsened over the past year, with more shoppers unable to afford basic necessities. This concerning trend is highlighted by Dollar General, a retailer known for affordable items and considered an indicator of the economic health of low and middle-income consumers. Dollar General’s primary customers earn less than $40,000 annually, and the chain operates over 20,000 stores, predominantly in rural areas. CEO Todd Vasos stated during an earnings call that customers reported their financial situations had worsened due to ongoing inflation. Many customers mentioned they only have enough money for essentials, sometimes even having to forgo these necessities. Although inflation slowed in February for the first time in five months, costs such as housing and healthcare remain high, impacting consumer budgets. Dollar General noted a 1.2% increase in sales at stores open for at least one year, attributed to fewer visits from primary customers due to financial pressures. Additionally, middle-income consumers are increasingly shopping at Dollar General, indicating broader financial strain. The company also warned that President Donald Trump’s tariffs on imported goods could hurt consumer demand and lead to price increases, further straining customers. Many companies are observing a consumer slowdown across income levels due to inflation, tariffs, and stock market instability. Economic uncertainty has most significantly affected lower-income consumers, as noted by Kohl’s CEO Ashley Buchanan. According to Moody’s Analytics, between September 2023 and September 2024, high-income households increased spending by 12%, while working-class and middle-class households reduced spending during the same period. — news from CNN
