Discount stores

Americans are buying more and more at discount stores

U.S. consumers are increasingly shopping at discount stores, new data shows, as inflation remains relatively high.

Transactions at discount stores like Dollar Tree (DLTR), Dollar General (DG) and Five Below (FIVE) are up 65% this year from pre-COVID 2019, as of Nov. 14, according to data from Facteus, a company that tracks credit and debit card transaction data.

Looking at a longer period throughout the year, consumers intensified their purchases at discount stores, as shown in the graph above (green line).

Conversely, department store transactions at places like Target (TGT) and Walmart (WMT) are only up 38% this year compared to 2019, followed by 35% at wholesale clubs like Costco (COST) and Sam’s Club.

Customers shop at a Dollar Tree store on March 04, 2021 in Chicago. (Photo by Scott Olson/Getty Images)

Inevitable inflation

Inflation in the United States hit a 30-year high in October: the consumer price index (CPI) rose 6.2% in October from a year earlier, the largest increase on 12 months since November 1990.

Excluding food and energy prices, both considered more volatile, the index rose 4.6% over the same period and saw the biggest jump since 1991. electronics and household appliances experienced a big increase in sales.

Nonetheless, retailers like Walmart say their revenue is still exceed expectations as consumer spending appears to be strong during the holiday season despite cost concerns.

Retail sales jumped 1.7% in October from the previous month, according to the Commerce Department. This is the largest gain since March and the third straight month the number has increased.

Facteus data suggests many consumers want to seek lower prices – at discount stores – as effects of government stimulus to remove.

And even as consumers turn to low-cost options like Dollar Tree amid rising inflation, the retailer that sells goods for a dollar has been forced to raise prices due to current conditions.

In late September, the company said it was raising prices slightly above $1 in select stores.

Aarthi is a reporter for Yahoo Finance. She can be contacted at [email protected] Follow her on Twitter @aarthiswami.

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