Dollar General this week said that its core customers remain under pressure from higher prices, prompting it to hold its annual sales forecast steady, even as it raised its profit forecast. The company’s first quarter net sales rose 3.4% to $10.79 billion year over year.
“Rising gasoline prices linked to the Iran war are pressuring the budgets of lower- to middle-income households who are already facing inflationary costs of living. The company joined big-box retailers Walmart and Target, and key rival Dollar Tree, in flagging a cautious consumer spending environment,” Reuters reported.
Dollar General's finance chief Donny Lau said its customers are also feeling the pinch from cuts to SNAP.
The strain is more acute in rural communities, where shoppers are limiting travel, cutting back on trips and making trade-offs to stretch their budgets, Lau added.
Dollar General's core customers are primarily low- to moderate-income households earning about $35,000 a year or less, according to the report. Reuters highlighted that Dollar General, like Dollar Tree, is also benefiting from higher-income consumers (earning over $100,000) increasingly trading down and shopping at its stores.
The demand for dollar stores continues to grow. Last year, Dollar General announced plans for 450 new store openings in 2026, most of which will be located in rural communities and will feature larger floor plans to allow for expanded health and beauty and fresh produce offerings.