The jobs report this morning was weaker than expected with continued contraction in the manufacturing sector and steep revisions downward for July and August
Before cutting staff, did you know the BLS jobs reports were fairly accurate? Happened under Obama's watch...about 14 years ago.
The more affluent are buying from discounters - Walmart, for example, saw an increase in sales by 5%. Meanwhile the Walmart shoppers are shopping down to DG and Family Dollar... but their base customers are just not buying. They are cash strapped.
Dollar General’s core customers are households earning less than $35,000 annually. They make up about 60% of its overall sales. More than 60% of these households claimed they have had to sacrifice on purchasing basic necessities and have also had to pay more for expenses such as rent, utilities and health care due to inflation, Vasos said to investors.
Sharing a similar picture of Family Dollar customers, Dollar Tree COO Mike Creedon said in an earnings call that more than 40% of Family Dollar’s customers are eligible for some form of government assistance, including SNAP benefits.
Meanwhile back at the ranch,
According to (Dollar General CEO Todd Vasos), Dollar General’s core customers have been less confident of their financial position, citing internal customer data and survey work: the majority of them said they feel worse off financially than they did six months ago because of higher prices, softer employment levels and increased borrowing costs. “While middle- and higher-income households are seeking value as well, they don’t claim to feel the same level of pressure as low-income households,” he said.
Additionally, Vasos said more of its customers have said they are now using credit cards for basic household needs, and about 30% have at least one credit card that has reached its limit. Twenty-five percent of its customers said they expected to miss a bill payment within the next six months.
“Notably, the three softest comp sales weeks of the quarter were the last week of each of the calendar months,” Vasos said. “This pattern suggests that our customers are less able to stretch their budgets through the end of the month.”
