Discount Shift
Money has been a big issue for American citizens throughout 2022, with brands they used to love and enjoy now being unaffordable. Corporate results last week showed us that it’s probably not going to change as most companies can’t afford to decrease prices with profit margins already decreasing. This leaves consumers in a pickle where they must adapt to the current climate, but some stores are known to keep their prices low, especially when it’s in their name.
That’s right, dollar stores are providing a nice cushion for consumers during the recent inflationary periods. According to data from InMarket, spending at dollar and discount stores rose by 71 percent from October of 2021, when inflation slowly started to rise. Companies like Dollar General and Dollar Tree are quickly adapting to this change by doing things like expanding fresh produce to more of their stores across the nation while continuing to offer general food items for consumers to purchase. Although big retail like Walmart is struggling with the current situation, their Sam’s Club division is starting to be in high demand because of the division’s wholesale prices that allow you to buy in bulk, reducing the amount of purchases families make. In May, Walmart said that Sam’s Club membership income rose by 10.5 percent from last year, and it’s safe to assume that we’ll see something similar in their upcoming earnings call. Families are doing all sorts of things to survive, like eating more vegetarian due to the rise in meat and poultry prices, and private label businesses are also becoming a beneficiary while name brands are struggling.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
