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More Consumers Shopping at Dollar Stores as Confidence in the Economy Shrinks

More Consumers Shopping at Dollar Stores as Confidence in the Economy Shrinks

More people are cutting down on name-brand items, too.

The Biden administration keeps trying to make the economy sound strong and bright, but reading between the lines shows a different story.

Consumer spending has increased, but with many changes to lifestyles and choices.

More Americans are turning to dollar stores and discount grocery places as food prices increase monthly while salaries and hourly wages barely budge:

Phoenix Kamlo, 41, has been relying on the Family Dollar for an increasingly large share of groceries for his family of five.

“Everything in there is super-duper sweet,” he says, citing the high sugar content of goods from tea to canned fruit. “But it’s nearby, and it’s cheap.”

Income from his Wichita, Kan., tailoring and alterations business has gone down in recent months, he says. He suspects his longtime customers are more focused, like he is, on affording enough to eat.

Dollar General has fresh produce in about 2,300 out of the 18,000 stores in the country.

Dollar Tree, owner of Family Dollar, has many food options like produce, eggs, and milk in almost all of its 16,162 stores.

Bulk shopping has become more popular with a cut in name brands:

Other households are buying in bulk or making do without items they never used to think twice about spending money on. Sam’s Club membership income was up 10.5% year-over-year, according to parent company Walmart’s May earnings call.

Consumer-products giant Procter & Gamble Co. just posted its largest sales gain in 16 years. Still, the company is predicting its slowest sales growth in years as consumers cut back on household staples like the company’s Tide detergent and Pampers diapers.

Elayna Fernandez, a 45-year-old single mom of four, has taken on the role of shampoo-and-conditioner police, making sure her longhair daughters don’t use more than they need.

“I am very conscious about not using a lot of those products,” says Ms. Fernandez, who runs a digital-marketing company and parenting blog. She recently purchased a Sam’s Club membership to buy more in bulk, and switched to store-brand versions of almond milk and granola bars.

Unilever and Kraft Heinz also “reported lower volumes in their latest quarters.” Customers want more “low-cost laundry, cat litter and other products” from Church & Dwight, maker of Arm & Hammer.

The Consumer Price Index (CPI) continues to increase with inflation:

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 1.4 percent from May 2022 to June 2022 before seasonal adjustment, up 9.1 percent from June 2021. The CPI for all food increased 1.0 percent from May 2022 to June 2022, and food prices were 10.4 percent higher than in June 2021.

The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home:

  • The food-at-home (grocery store or supermarket food purchases) CPI increased 1.0 percent from May 2022 to June 2022 and was 12.2 percent higher than June 2021; and
  • The food-away-from-home (restaurant purchases) CPI increased 0.9 percent in June 2022 and was 7.7 percent higher than June 2021.

The USDA Economic Research Service predicts that “food price increases are expected to be above the increases in 2021 and 2022.”

Eight food categories went up by at least 1%. Three of those categories went up by 2%:

In 2022, all food prices are now predicted to increase between 8.5 and 9.5 percent, food-away-from-home prices are predicted to increase between 6.5 and 7.5 percent, and food-at-home prices are predicted to increase between 10.0 and 11.0 percent.

  • Beef and veal declined between May 2022 and June 2022, but other meats went up by 1% and 16.7% from July 2021 to June 2022.
  • Poultry went up 1.5% between May 2022 and June 2022 and increased 17.3% between July 2021 and June 2022.
  • Eggs went went up .3% between May 2022 and June 2022 and increased 33.1% from July 2021 and June 2022.

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Comments


 
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rhhardin | August 1, 2022 at 3:03 pm

That’s good news. Price is in fact allocating scarce stuff to the most efficient uses and people are instead buying stuff that is not scarce.


 
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buck61 | August 1, 2022 at 3:12 pm

a word to the wise, while most things can be cheaper at the Dollar Store not everything is, shop carefully


 
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Peabody | August 1, 2022 at 3:13 pm

More people shopping at Dollar Stores? I don’t see why. We are not in a recession.


 
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CommoChief | August 1, 2022 at 3:54 pm

The food at these stores is not great and generally overpriced in comparison but the stores exist where others don’t and serve a need. They do have some decent to very good offerings in non food items though which is why I occasionally go in. A local or regional grocery is your best bet on food if one is an option. Better yet is a contract with a local farmer.


     
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    Jmaquis in reply to CommoChief. | August 1, 2022 at 4:32 pm

    We had a home in Prince Edward Island for many years and bought from an Amish farmer and his family. Those products (eggs, fruit, vegetables and sometimes bakes goods) were better than any other store on the island and at less cost. Farm fresh RULES!


       
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      txvet2 in reply to Jmaquis. | August 1, 2022 at 6:40 pm

      “”Farm fresh RULES!””

      Depends on where you are. I’ve tried buying from local fresh produce stands and the rule of thumb is, shop well before noon, because stuff that sits in the hot Texas sun is going to be overripe to rotten by afternoon.


       
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      Geologist in reply to Jmaquis. | August 1, 2022 at 8:30 pm

      When I drive through the Gilroy area, the “Farm Fresh” stands are really “Tourist Trap” stands with very high prices. Buyer beware!


         
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        CommoChief in reply to Geologist. | August 2, 2022 at 8:07 am

        Not a roadside stand of indeterminate produce.

        Instead try and find a local mixed farm that uses CSA, community supported agriculture contracts. In essence you pay x amount per year and buy a percentage of the farm output. Same with pork and beef producers; you can purchase 1/4 increments of a cow as an example. It’s local, you know who and where what you are eating comes from and it can be a long term relationship.


     
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    Bruce Hayden in reply to CommoChief. | August 1, 2022 at 6:39 pm

    We got a combined Family Dollar/Dollar Tree in town last year, and it’s great. But a lot of the Dollar General food prices are maybe a smidgen above the grocery store across the street. Still, I hit it maybe once a week.


     
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    gonzotx in reply to CommoChief. | August 2, 2022 at 9:53 am

    Coloring books amd crayons


 
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drednicolson | August 1, 2022 at 5:48 pm

Around here, Dollar Tree ought to rename itself Dollar (and a Quarter) Tree, because they’ve hiked everyting up by 25c.


 
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healthguyfsu | August 1, 2022 at 11:18 pm

Five below will now become 5 above.

We have a Family Dollar store several blocks away, within walking distance. It is my go-to place for work snack foods and raman (yep, I’m cheap) for many years now. Sometimes they even have sales on soda that drops below the prices of the big box retailers. Personally, I’ve got a weakness for the cheese and crackers, which is *always* less expensive than anywhere else, or Whales (generic goldfish crackers) or even chicken-flavored crackers. Cash or credit card, no checks, no booze, and open late.


 
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murkyv | August 2, 2022 at 3:13 am

I have a DG within a mile a half away in my tiny tiny town.

I watch the weekly sales at another small town grocer/meat market and stock up on their meat on sale

Top quality, custom cut and far below chain grocery prices.

Between that, my garden, and DG, a once-a-month trip to Walmart, I’m pretty well covered

Only time I go to Kroger is to pick up my prescriptions every 90 days


 
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amwick | August 2, 2022 at 6:34 am

I am happily sitting sipping coffee in dollar general pjs… on sale.. 75% off. Canary yellow tweety bird. Stylish as all get out.

It is more than just the current state of inflation.. Dollar generals are ubiquitous. My tiny town in Georgia has at least two. My neighbor calls the nearest one the T valley mall.

Another trend, trending is thrifting. It is now cool to buy and wear old clothes. I have been way ahead of that for years….

Progressive prices forced by single/central/monopolistic solutions and arbitrage schemes.

You do realize where that ” Dollar Store ” stuff comes from…
Right?

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