Currency

Dollar General CEO reveals alarming change in consumer behavior: ‘We are not anticipating improvement’

Dollar General’s CEO says the discount store has seen less shoppers because of their ‘worsened’ financial situations – and these circumstances will not improve anytime soon.

The store’s year-over-year customer traffic has dropped by one percent, according to Dollar General’s 2024 fourth-quarter earnings report. 

More alarmingly for the multibillion-dollar company, operating profits have plummeted by about 49 percent – partially to do with shuttered locations

‘Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation,’ CEO Todd Vasos said during Dollar General’s fourth-quarter earnings call. 

‘Many of our customers report they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities.

‘As we enter 2025, we are not anticipating improvement in the macroenvironment, particularly for our core customer. In turn, we know our customers expect value and convenience more than ever.’ 

Vasos said ‘core customers’ are already ‘always strained,’ so they cannot handle any additional financial burdens.

He also discussed how the tariffs Donald Trump imposed on imported goods will cause a price hike in Dollar General products, making them even more unaffordable. 

CEO Todd Vasos revealed the popular discount store sees less shoppers because of their 'worsened' financial situations and the circumstances will not improve anytime soon

CEO Todd Vasos revealed the popular discount store sees less shoppers because of their ‘worsened’ financial situations and the circumstances will not improve anytime soon

Dollar General's 'core customers' cannot afford anymore price hikes that stem from inflation and tariffs

Dollar General’s ‘core customers’ cannot afford anymore price hikes that stem from inflation and tariffs  

On March 4, Trump increased the tax on items imported from China from 10 percent to 20 percent. He also imposed 25 percent tariffs on goods from Mexico and Canada

The CEO said when Trump enforced tariffs during his first presidential term in 2018 and 2019, Dollar General had to drive up their prices. 

But he said the company was able to lighten the impact at the time and is ‘well-positioned’ to do so again.  

Vasos asserted during the Thursday meeting: ‘Given the already stressed financial condition of our core customer, we are closely monitoring these [tariffs] and any other potential economic headwinds, including any changes to government entitlement programs.’

The fourth-quarter report revealed a 1.2 percent growth in same-store sales during holiday season and a 2.3 percent increase in the amount of money costumers spend each transaction. 

There are about 20,000 Dollar General stores across the US and 96 of those stores, along with 45 locations under its pOpshelf brand, will be shutting down because they are not making enough money. 

‘While this is less than one percent of our overall store base, those stores, many of which are in urban locations, have become increasingly challenging to successfully operate,’ Vasos said. 

There are about 20,000 Dollar General stores across the US and 96 of those stores, along with 45 locations under its pOpshelf brand, will be shutting down

There are about 20,000 Dollar General stores across the US and 96 of those stores, along with 45 locations under its pOpshelf brand, will be shutting down

The store's year-over-year customer traffic has dropped by one percent, according to Dollar General's 2024 fourth-quarter earnings report

The store’s year-over-year customer traffic has dropped by one percent, according to Dollar General’s 2024 fourth-quarter earnings report 

For the fourth quarter of fiscal year 2024, Dollar General reported a 4.5 percent revenue increase to $10.3 billion, but net income plunged to $191 million – less than half of what it earned in the same period a year earlier.

Dollar General’s stock had slumped nearly 70 percent in the last two years amid stiff competition from Walmart, Shein and Temu.

Despite closures and the looming threat of the famously affordable store becoming too expensive, Vasos is hoping to bring in more customers by growing Dollar General’s delivery services. 

He explained: ‘Expanding our delivery up to 400 stores and then aiming to move to 10,000 by the end of the year is and should be a competitive advantage.’ 


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