Dollar stores are benefiting from consumers seeking affordable necessities amid skyrocketing inflation.
“Combined with improvement in merchandising and store standards, we believe we are putting our best foot forward at a time when customers are coming to us to help them navigate difficult times,” Dollar Tree President and CEO Mike Witynski said in a press release.
Dollar Tree saw its same-store sales increase 4.9%, while Dollar General recorded a same-store sales increase of 4.6%.
“We are pleased with our second quarter results, and I want to thank our associates for delivering another quarter of strong performance during a period of inflation and economic uncertainty,” Dollar General CEO Todd Vasos said in a press release.
Dollar General reported that its same-store sales were driven by an increase in average transaction amount and a slight increase in customer traffic, adding that it saw growth in the consumables category, which was partially offset by declines in the apparel, seasonal and home products categories.
The company expects this growth to continue. Looking ahead to the remainder of the fiscal year, Dollar General now expects same-store growth of 4.0% to 4.5%, up from its previous expectation of 3.0% to 3.5%.
“During the quarter, we also made significant progress advancing our operating priorities and strategic initiatives, further enhancing our unique value and convenience proposition,” Vasos said in the release.
Similarly, Dollar Tree expects to see a mid-single-digit increase in comparable store sales increase for the full fiscal year.
The company is also making an “investment in pricing,” Witynski said, reducing its gross margins in order to offer competitive prices to consumers who are looking for needed consumable products.
“Our second quarter performance reinforces the relevance of our brands for millions of households pressured by higher costs for food, fuel, rent and more,” Witnyski said.
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