Discount stores

Spending at discount stores skyrockets as shoppers search for deals: inflation

  • Shoppers are flocking to discount stores as inflation hits 30-year highs.
  • Facteus credit and debit card transaction data showed that sales grew 65% in this industry.
  • Discount and dollar stores generally thrive in uncertain economic environments.

Cash-strapped shoppers are flocking to discount stores as inflation spikes.

According to Facteus credit and debit card transaction data, first reported by Bloomberg, spending at discount stores jumped 65% in the week ending Nov. 7 from the same. period in 2019. This is the biggest increase in discount store spending since March, when government stimulus checks were sent to millions of US households, boosting sales at retailers.

Spending at discount stores was up 21% from the previous week, according to Facteus.

Discount stores – chains such as Dollar General and Dollar Tree – have seen by far the biggest increase in retail spending, data shows, indicating shoppers prioritize deals and discounts in the environment inflationary today. The data also doesn’t account for all buyers who paid in cash, which is common in low-cost stores.

Discount or dollar stores, which sell for $ 10 and under, generally thrive in times of economic uncertainty. With the annual inflation rate accelerating at its fastest pace in over 30 years in October, they are in a prime position to benefit.

Yet these chains are also under pressure to keep prices low and remain competitive as their overhead costs skyrocket.

Dollar Tree, the latest major chain to deliver on its $ 1 and under pledge, said it would break the ball in September and add new prices of $ 1.25 and $ 1.50.

At the time, the company justified the new prices by saying that they would allow it to offer a wider assortment of products. However, in previous earnings calls, executives admitted that higher shipping and raw material costs put a strain on profits and that the company was more sensitive to these costs than its competitors due to its $ 1 pledge.

Prices slowly increased in rival chains. Recent price checks at Family Dollar and Dollar General stores, which were carried out by Gordon Haskett analyst Chuck Grom, revealed that popular products such as Coca-Cola or Lay’s potato chips have seen their prices increase by $ 0.50 to $ 1.50 from the previous year.