As Dollar General continues to focus on its signature $1 price point even as inflation pushes up costs across the economy, the company is looking to Walmart to set the pace, the discounter’s top executive said yesterday during an event for investors.
“Walmart is the leader in price, and that's who we all look to and follow,” Dollar General CEO Todd Vasos told investors during Goldman Sachs’ online Global Retailing Conference, adding that he believes his company is ahead of other retailers in keeping prices down for consumers.
Vasos added that Dollar General has been attracting a growing number of shoppers who earn more money than its traditional customer as they look for refuge from inflation, a phenomenon that Walmart has also seen.
Dollar General has been particularly successful at drawing in shoppers who earn between $40,000 and $60,000 per year, noting that the retailer’s core customers typically have incomes below that range, Vasos said. But in a reflection of the widening grip inflation is having on people across the income scale, the retailer has also been drawing more people who earn between $75,000 and $100,000, he said.
In a sign of just how deeply inflation is squeezing low-income shoppers, Dollar General is seeing increasing signs that its focus on low prices has emerged as a survival tool for many of its core customers, Vasos said.
“Our core customer is running out of money that … fourth week of the month” as they wait for their next paycheck, Vasos said. “And so she's told us that I really need that $1 price point ... to be able to feed my family.”
Dollar General has been stepping up its efforts to offer as many products as possible for $1 or less, and Vasos — who is set to retire later this year — reiterated that the company plans to continue that push.
“Not only do we believe we need to continue to foster that $1 price point, but we need to grow it,” he said.
Vasos added that shoppers have been coming into stores more often and spending less on each trip than they did during the height of the pandemic, when people tended to avoid visiting stores to avoid getting sick. The company expects that pattern to remain in place at least through the end of the year, he said.