Insight Flash: CE data uncovers divergent trends in dollar store space and increasing reliance on high-income shoppers
With the latest flurry of dollar store and discounter earnings, CE Transact data successfully pointed to divergent trends among the major players in the space, with Dollar Tree (DLTR) outperforming Dollar General (DG) and Five Below (FIVE) by a meaningful margin.
Dollar Stores Reported Data
One narrative that has permeated this earnings cycle is a trade-down effect among more affluent shoppers. Dollar Tree management noted that an outsized portion of new customer growth has come from higher-income shoppers, and this trade-down dynamic has also featured in headlines, surveys and other outlets. Leveraging CE’s unique demographic data cuts, we can see that, while dollar stores have historically been most exposed to the lower income shopper…
Dollar Stores Shopper Income Brackets
…the rate of growth in affluent shopper exposure is growing, especially in recent months. In fact, the percentage of new customers coming from the $100k+ income cohorts has increased for all four banners, most significantly for the two banners that have historically relied upon that group the least – Dollar General and Family Dollar. This convergence suggests that the health of higher-income spending at these stores will be crucial for the entire industry in the months ahead.
New Customer Contribution
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