Something unusual is happening at Dollar Tree: The retailer said this week that of the 3 million new households that shopped at its stores in the third quarter, nearly 60% of those new customers came from households Earn more than $100,000 annually.
This trend highlights the deep division in the American economy. while Cumulative inflation has led to higher prices Nearly 25% since 2020, wage growth has not kept pace for most households, leaving consumers across the income spectrum hunting for bargains.
“High-income households trade at Dollar Tree; low-income households depend on us more than ever,” said Dollar Tree CEO Michael Creedon Jr. Analysts said on Wednesday. The Virginia-based chain, where 85% of sales during the quarter were priced at $2 or less, reported same-store sales growth of 4.2%.
Dollar Generalthe nation’s largest dollar store chain with nearly 21,000 locations, reported similar dynamics in its own earnings report this week. CEO Todd Vassos noted “Disproportionate growth coming from higher-income households” in the third quarter, as same-store sales rose 2.5% with a 2.5% increase in customer traffic. The company’s net profits rose 44% to $282.7 million. Discount retail chain Five Below also raised its earnings forecast for the rest of the year, supported by demand for budget-friendly goods and a weak labor market.
The shift reflects what analysts describe as a K-shaped economy, where wealthy Americans – buoyed by stock market gains and rising asset values – continue to spend freely while everyone else tightens their belts. According to RBC’s analysis of the economyThe top 10% to 20% of income earners are driving consumption growth, while the bottom 80% of the population have little financial reserves and are experiencing increasing pressure.
Krogerthe nation’s largest supermarket chain, painted a similar picture in its earnings report on Thursday. CEO Ron Sargent told analysts The company is seeing a “split between income groups,” with spending from upper-income households remaining “strong” while “middle-income customers are feeling increased pressure, similar to what we have seen from lower-income households over the past few quarters.”
These consumers are “taking smaller, more frequent trips to manage budgets, and are cutting back on discretionary purchases,” Sargent added.
Financial stresses appear in credit statements. US household debt reached a record high of $18.59 trillion In the third quarter of 2025, with credit card delinquencies rising to levels not seen since 2011. Meanwhile, annual inflation reached 3% in September, According to the Bureau of Labor Statistics.
For dollar stores, the influx of affluent shoppers presents both an opportunity and a challenge. At Dollar Tree, traffic actually declined 0.3% — the first decline since fiscal 2022 — even as the chain gains new customers, because higher-income households visit less frequently than the chain’s core consumers.
Dollar Tree also had to raise prices because of tariffs, a process that Creedon admitted was a “necessary evil.” The company’s CFO referred to this as “tariff-related labeling activities.”
For this story, luck Journalists have used generative AI as a research tool. An editor verified the accuracy of the information before publication.
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2025-12-04 19:05:00
