Shoppers flock to discount stores as inflation hits 30-year highs.
Data on credit and debit card transactions from Facteus showed that sales increased by 65% in this sector.
Discount and dollar stores typically thrive in uncertain economic environments.
Cash-strapped shoppers flock to discount stores as inflation bites.
According to credit and debit card transaction data from Facteus, first reported by Bloombergspending at discount stores jumped 65% in the week ending November 7 compared to the same period in 2019. It was the largest increase in spending at discount stores since March, when government stimulus checks have been sent to millions of American households, boost sales at retailers.
Discount store spending was up 21% from the previous week, according to Facts.
Discount stores – chains such as Dollar General and Dollar Tree – has seen by far the largest increase in retail sector spending, data showed, indicating shoppers are prioritizing deals and discounts in the current inflationary environment. The data also doesn’t account for all shoppers who paid in cash, which is common in discount stores.
Discount or dollar stores, which offer prizes $10 and under, typically thrive in times of economic uncertainty. With the annual rate of inflation accelerating to 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 stay competitive as their overheads soar.
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 past earnings callsexecutives admitted that higher shipping and raw material costs weighed on profits and that the company was more sensitive to these costs than competitors due to its $1 promise.
Prices have slowly risen at competing chains. Recent Price Checks in Family Dollar and Dollar General stores, which was carried out by Gordon Haskett analyst Chuck Grom, revealed that popular products such as Coca-Cola or Lay’s potato chips saw their prices increase between $0.50 and 1, $50 over the previous year.
Read the original article at Business Intern