Frugal consumers translate to high profits for Dollar General

Adriene Hill Sep 4, 2013
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Frugal consumers translate to high profits for Dollar General

Adriene Hill Sep 4, 2013
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There are a couple ways to read the continued successes of Dollar General, and dollar stores in general.

“It’s a reflection of the ongoing plight of the middle class and low income consumers,” says Sean Snaith, head of the Institute for Economic Competiveness at the University of Central Florida, “the labor market’s recovery has been underwhelming; the recovery in general has been weak.”

In other words, people keep on spending at the dollar store because it’s what they can afford.

But John Champion, a retail analyst at Kurt Salmon, says we shouldn’t read too much doom and gloom into positive dollar store earnings. 

“I’m not sure I would over-read their barometer as a measure of the economy,” Champion says. 

Champion thinks that as the number of low-price stores out there grows, shopping at dollar stores has become more and more normal for all of us. And, he thinks, it’ll stay that way, even in an improving economy. 

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