Store closures may usually be the retailer’s logo for a period of time. Take Cole, which closed about two dozen stores earlier this year and released Disappointing income report this week.
US dollar general This trend is being reversed. Fortune 500 discount retailers said Thursday Income Report It closed 96 locations in the fourth quarter ending in late January, but its net sales actually rose 4.5% to $10.3 billion. Net sales jumped 5.0% to $40.6 billion throughout fiscal 2024. Shares rose more than 3.5% as of noon Thursday.
Dollar General had higher traffic growth in the second half of the fourth quarter of fiscal 2024. placer.ai Provided to wealth. After the holidays, consumers may be more cost-conscious and look for discount retailers. wealth.
“In the past year, consumer interest in low-priced and valuable products has only grown in the context of consumer sentiment, and potential changes in shopper behavior may grow,” Lafontaine said.
Placer.ai’s data also suggests that the dollar generally outperforms other discounts for flow of people and dollar retailers, although many companies in this category perform well given their customers looking for deals in terms of inflation and economic uncertainty.
Nicole DeHoratiusa professional practice professor Columbia Business SchoolIn this era of inflationary prices, families are looking for ways to make the most of their budgets, and shopping in stores like Dollar General can do that.
“The pressure on the family budget – leading to the current Economic uncertainty– It is likely to continue, as retailers that can provide value to their consumers should lead in advance. ” DeHoratius told wealth.
In late February, University of Michigan Consumer sentiment index Joined it The weakest reading Since November 2023. Concerns about inflation and tariffs by President Donald Trump have caused losses to consumer confidence and have sent stocks in the past few weeks.
However, Todd Vasos, CEO of Dollar General, seems confident that discount retailers can avoid the impact of tariffs.
“We think we have a good location to mitigate the impact of (tariffs) in 2025,” Vasos said on Thursday’s earnings call. “We were able to successfully mitigate the tariff impacts in 2018 and 2019.”
However, VASO acknowledged in 2018 and 2019 that the company “has indeed increased retail prices in some cases with other situations across the industry.”
“Given that our core customers are already under great pressure, we are closely monitoring these and any other potential economic headwinds, including any changes to the government’s entitlement scheme,” Vasos said.
Meanwhile, other discount retailers, including Walmartshowing signs of struggle. Although Walmart releases another quarter of growth In late February, its forecast for 2025 was underperformed when stocks fell. Walmart stock was down 18% from its February 19 peak at $104 per share.
“Our outlook assumes a relatively stable macroeconomic environment, but acknowledges that there is still uncertainty related to consumer behavior and the global economic and geopolitical situation,” Walmart Chief Financial Officer John David Rainey said on a revenue call in late February.
share Dollar TreeAnother Fortune 500 discount chain has also dropped by about 15% since the beginning of the year.
Dollar General also plans to expand in 2025. Part of the company’s plan to close nearly 100 underperforming stores, which account for less than 1% of the company’s total store footprint, is allocating resources to new stores. The company plans to open 575 stores in 2025 and renovate about 4,250.
This story was originally fortune.com
