Dollar General Suffers Worst Day on Record, CEO Warns
Aug 30, 2024 17:59:17 GMT -5
Post by Honoria on Aug 30, 2024 17:59:17 GMT -5
Dollar General Suffers Worst Day on Record, CEO Warns: Poor Consumers Are Running Out of Money
by Jared Harris, The Western Journal
Aug. 30, 2024 1:00 pm
Dollar General suffered a record one-day drop as the company’s stock tanked amid a warning about the struggling U.S. consumer.
The Thursday trading day marked a slaughter for Dollar General, seeing the stock crater by an eye-watering 32.01 percent, according to Barron’s.
It was the company’s worst one-day decline in history, smashing the previous record drop of 19.5 percent set on June 1, 2023. Dollar General has been publicly traded since 2009.
Dollar General is no small player.
According to the Financial Times, the Tennessee-based company has over 20,000 locations across all but two states.
The retailer’s painful decline hints at larger troubles with consumers and the American economy.
Dollar General’s core customers are typically from households that bring in less than $35,000.
Todd Vasos, chief executive of the Dollar Store chain, said that group of people is feeling more “financially constrained” than ever.
“The majority of them state that they feel worse off financially than they were six months ago as higher prices, softer employment levels and increased borrowing costs have negatively impacted low-income consumer sentiment,” Vasos said in a Thursday earnings call.
The higher prices Vasos mentioned are in large part due to inflation — a force that has raised prices on goods across the board under the administration of President Joe Biden and his upstart deputy Vice President Kamala Harris.
Inflation works as a double-edged sword against consumers, who have to face higher prices with a U.S. dollar that is rapidly losing its purchasing power at home and abroad.
Rural towns and poorer areas, where Dollar General concentrates its locations, are among those places most affected by economic downturns.
Under this hostile environment, Dollar General’s CFO Kelly Dilts said the store’s typical customer has “started to run out of money by the end of the month,” Financial Times reported.
Compounding the problems for Dollar General are societal issues all stores are now facing: chiefly, shoplifting and other forms of theft.
Dubbed “shrink” in the retail industry, unscrupulous customers’ constant five-finger discounts are a slow drain on any location targeted. Businesses that opt for private security also have to consider increased labor costs from this and the possibility of lawsuits or destructive confrontations.
Some stores have invented novel and radical ways to reduce theft, including a one-on-one shopping experience where each customer is guided by an employee.
Obviously, these strategies may help to lower theft, but inevitably lead to a less-than-ideal atmosphere for average consumers.
If the situation does not improve for Dollar General and the American consumer, more financial pain is guaranteed to be felt.
link
by Jared Harris, The Western Journal
Aug. 30, 2024 1:00 pm
Dollar General suffered a record one-day drop as the company’s stock tanked amid a warning about the struggling U.S. consumer.
The Thursday trading day marked a slaughter for Dollar General, seeing the stock crater by an eye-watering 32.01 percent, according to Barron’s.
It was the company’s worst one-day decline in history, smashing the previous record drop of 19.5 percent set on June 1, 2023. Dollar General has been publicly traded since 2009.
Dollar General is no small player.
According to the Financial Times, the Tennessee-based company has over 20,000 locations across all but two states.
The retailer’s painful decline hints at larger troubles with consumers and the American economy.
Dollar General’s core customers are typically from households that bring in less than $35,000.
Todd Vasos, chief executive of the Dollar Store chain, said that group of people is feeling more “financially constrained” than ever.
“The majority of them state that they feel worse off financially than they were six months ago as higher prices, softer employment levels and increased borrowing costs have negatively impacted low-income consumer sentiment,” Vasos said in a Thursday earnings call.
The higher prices Vasos mentioned are in large part due to inflation — a force that has raised prices on goods across the board under the administration of President Joe Biden and his upstart deputy Vice President Kamala Harris.
Inflation works as a double-edged sword against consumers, who have to face higher prices with a U.S. dollar that is rapidly losing its purchasing power at home and abroad.
Rural towns and poorer areas, where Dollar General concentrates its locations, are among those places most affected by economic downturns.
Under this hostile environment, Dollar General’s CFO Kelly Dilts said the store’s typical customer has “started to run out of money by the end of the month,” Financial Times reported.
Compounding the problems for Dollar General are societal issues all stores are now facing: chiefly, shoplifting and other forms of theft.
Dubbed “shrink” in the retail industry, unscrupulous customers’ constant five-finger discounts are a slow drain on any location targeted. Businesses that opt for private security also have to consider increased labor costs from this and the possibility of lawsuits or destructive confrontations.
Some stores have invented novel and radical ways to reduce theft, including a one-on-one shopping experience where each customer is guided by an employee.
Obviously, these strategies may help to lower theft, but inevitably lead to a less-than-ideal atmosphere for average consumers.
If the situation does not improve for Dollar General and the American consumer, more financial pain is guaranteed to be felt.
link
