You know things aren’t going well when even Dollar General is in the red.
On Thursday, the discount retailer that took over rural America over the past decade saw its stock take a major hit, dipping 26% following the company’s earnings report. It’s the largest intraday drop in company history—and a sign of even more economic strain on lower-income consumers.
As CEO Todd Vasos explained in a statement to CNBC, there are a few factors at play here. At the top of their concerns is the money, or lack thereof, that their customers possess. Vasos cited a “financially constrained” customer as one of the prime reasons Dollar General was lowering its expected sales targets for the year. He mentioned a few other in-house problems, too, including inventory concerns and losses due to shoplifting.
In the company filings statement, per Financial Times, Dollar General reiterated how its target customers are “among the first to be affected by negative or uncertain economic conditions.” That echoed the sentiment of Home Depot’s recent earnings report, where the home improvement chain said high interest rates and other economic woes were keeping customers from spending money on their houses.
Dollar General, which is headquartered in Tennessee, is the largest dollar store chain in the country, with over 20,000 locations in the States. Its main competitors Dollar Tree and Family Dollar, only have about 14,500 locations combined.
Six years ago, VICE News reported on the company’s expansion in parts of the country that had been slow to rebound from the 2008 recession: low income, rural communities that larger retailers won’t touch. Dollar General was blamed, much like Walmart had been, for putting local grocery stores out of business. Now, apparently, it’s struggling too.
The post Dollar General Conquered Rural America. Now It’s Struggling With “Financially Constrained” Customers. appeared first on VICE.
The post Dollar General Conquered Rural America. Now It’s Struggling With “Financially Constrained” Customers. appeared first on VICE.
