Dollar General's CEO says the discount store has seen less shoppers because of their 'worsened' financial situations - and these circumstances will not improve anytime soon.
The store's year-over-year customer traffic has dropped by one percent, according to Dollar General's 2024 fourth-quarter earnings report.
More alarmingly for the multibillion-dollar company, operating profits have plummeted by about 49 percent - partially to do with shuttered locations.
'Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation,' CEO Todd Vasos said during Dollar General's fourth-quarter earnings call.
'Many of our customers report they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities.
'As we enter 2025, we are not anticipating improvement in the macroenvironment, particularly for our core customer. In turn, we know our customers expect value and convenience more than ever.'
Vasos said 'core customers' are already 'always strained,' so they cannot handle any additional financial burdens.
He also discussed how the tariffs Donald Trump imposed on imported goods will cause a price hike in Dollar General products, making them even more unaffordable.
On March 4, Trump increased the tax on items imported from China from 10 percent to 20 percent. He also imposed 25 percent tariffs on goods from Mexico and Canada.
The CEO said when Trump enforced tariffs during his first presidential term in 2018 and 2019, Dollar General had to drive up their prices.
But he said the company was able to lighten the impact at the time and is 'well-positioned' to do so again.
Vasos asserted during the Thursday meeting: 'Given the already stressed financial condition of our core customer, we are closely monitoring these [tariffs] and any other potential economic headwinds, including any changes to government entitlement programs.'
There are about 20,000 Dollar General stores across the US and 96 of those stores, along with 45 locations under its pOpshelf brand, will be shutting down because they are not making enough money.
'While this is less than one percent of our overall store base, those stores, many of which are in urban locations, have become increasingly challenging to successfully operate,' Vasos said.
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