Dollar General CEO Warns of Ongoing Financial Strains for Customers

Dollar General CEO Todd Vasos expressed concerns on Thursday regarding the financial strains that inflation is inflicting on the company's customers. Vasos stated during the fourth-quarter earnings call that the overall economic landscape is not expected to improve this year, which adds further challenges for shoppers looking for value.

Vasos emphasized that customers are prioritizing value and convenience from Dollar General more than ever before. He noted, “Our customers continue to report that their financial situation has worsened over the last year due to persistent inflation. Many are finding they can only afford basic essentials, with some indicating they have even compromised on necessary items.” He added, “Looking ahead to 2025, we do not foresee any improvement in the broader economic environment, especially for our core customer base.”

The typical Dollar General shopper is always financially strained, but Vasos pointed out that they are also resourceful. He remarked, “We’ve started to see our customers adapting to the continuous inflation and they are becoming more aware of their budgeting.”

Vasos also mentioned the uncertainty surrounding the possible effects of former President Donald Trump's tariffs on consumers. He explained that when tariffs were imposed during Trump’s presidency in 2018 and 2019, Dollar General had to increase some prices in line with industry standards. However, he felt that the store is well-prepared to navigate such issues if they arise again this year.

“Given the financial difficulties faced by our core customers, we are monitoring these potential economic challenges closely, as well as any changes to government assistance programs,” Vasos stated.

Dollar General's Chief Financial Officer Kelly Dilts added that the company's guidance for 2025 reflects ongoing economic stress on consumers, but does not take into account potential changes related to tariffs or government programs, such as the Supplemental Nutrition Assistance Program that supports low-income Americans.

For the fourth quarter, Dollar General reported a same-store sales growth of 1.2%, which was driven solely by a 2.3% increase in average transaction amounts. However, customer traffic fell by 1.1% during this period, primarily due to the ongoing financial pressures faced by their core consumers, as emphasized by Vasos.

In conjunction with the earnings report, Dollar General announced plans to close 96 of its stores along with 45 Popshelf stores, while also converting six additional Popshelf stores into flagship locations. Popshelf primarily caters to higher-income shoppers with lower-priced items.

Following these announcements, Dollar General's stock saw a 5% increase in morning trading.

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