Continued Economic Pressure on Consumers

In a recent earnings call, Dollar General CEO Todd Vasos highlighted the ongoing struggles faced by consumers due to persistent inflation, emphasizing that the macroeconomic landscape is unlikely to improve in the near future.

Vasos noted, “Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation. 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.” This statement underscores the strain felt by Dollar General’s core customers as they navigate an increasingly challenging financial environment.

Consumer Behavior and Company Adaptation

Vasos described the typical Dollar General customer as “always strained,” yet resilient in their approach to budgeting. He remarked, “We’ve started to see where [our customer is] getting her sea legs, if you will, on the additional inflation that’s been very sticky out there, and she’s starting to understand her budgets even more.”

Moreover, the CEO expressed caution regarding the potential repercussions of tariffs imposed during the previous administration, noting that previous price increases were necessary in response to such economic policies. “We are well positioned to do so again this year,” he stated, indicating the company’s readiness to adjust in the face of similar scenarios.

Financial Guidance and Store Closures

Dollar General’s Chief Financial Officer, Kelly Dilts, articulated that the company’s 2025 guidance accounts for sustained economic pressures faced by consumers. However, it does not reflect possible changes in tariff regulations or adjustments to government assistance programs, such as the Supplemental Nutrition Assistance Program.

For the fourth quarter, Dollar General reported a 1.2% increase in same-store sales, largely driven by a 2.3% rise in average transaction value, despite a 1.1% decline in customer traffic attributed to the financial challenges experienced by its consumer base.

In conjunction with its financial report, the company announced the closure of 96 Dollar General locations and 45 Popshelf stores, while also converting six Popshelf locations into flagship stores aimed at higher-income shoppers.

Market Response

Despite the reported challenges, Dollar General’s shares rose nearly 7% on the day of the announcement, reflecting investor confidence amid the ongoing economic adjustments.