Consumers focused on consumables at Dollar General and Dollar Tree

The lower income US consumer is shifting their spend to consumables and increasing theft at the ‘value’ stores designed to serve them.

Dollar General issued a press release today, August 31, 2023, which had 19,488 stores as of August 4, 2023.

“Same-store sales in the second quarter of 2023 included declines in each of the home, seasonal, and apparel categories, partially offset by growth in the consumables category.”

“This gross profit rate decrease was primarily attributable to lower inventory markups and increased shrink, markdowns, and inventory damages, as well as a greater proportion of sales coming from the consumables category, which generally has a lower gross profit rate than other product categories. These factors were partially offset by a lower LIFO provision and decreased transportation costs.”

In the first, we see that the US consumer, typically those at the lower end of the income curve, were shifting their expenditures to consumables like food.

In the second, we see that Dollar General had to lower their prices, and suffered from destruction and theft of their inventory. This is on a growing inventory base (up 3.4% on a…