Hard times are generally good times for discount retailers
of ConsumerAffairsAs inflation continues to impact household budgets, discount retailer Dollar General Corp. expects financial hardships for its core customers to persist into 2025. CEO Todd Vasos saidthat consumers are prioritizing basic essentials, with some even struggling to afford necessities.
"Our customers continue to report that their financial situation has worsened over the last year as they have been negatively impacted by ongoing inflation," Vasos said during the companys fourth-quarter fiscal 2024 earnings call last week.
"Many of our customers report that 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 macro environment, particularly for our core customer."
Despite economic uncertainty, Vasos emphasized Dollar General's ability to offer affordable products and noted that discount retailers are better positioned than convenience stores to provide the value consumers need.
"We know our customers expect value and convenience more than ever. We are committed to providing the value they need and continue to feel very good about our everyday low-price position relative to competitors and other classes of trade," he said.
Managing tariff impacts
Vasos also addressed concerns about tariffs, stating that Dollar General is prepared to mitigate potential financial impacts in 2025.
"We believe we are well-positioned to mitigate the impact in 2025. We were able to successfully mitigate the tariff impact in 2018 and 2019, though we did take retail price increases in some instances along with others across the industry," he explained.
Recognizing the financial strain on its core customer base, Dollar General is closely monitoring economic headwinds, including changes to government entitlement programs. "Importantly, we remain focused on doing everything we can to deliver the value our customers want and need," Vasos added.
Financial Performance
In the fourth quarter of fiscal 2024, Dollar General reported a sharp decline in net income, which fell 52.4% to $191.2 million compared to $401.8 million in the same quarter of fiscal 2023. The company, based in Goodlettsville, Tennessee, continues to navigate a challenging retail environment as inflation persists and consumers remain under financial pressure.
Posted: 2025-03-20 18:44:56
