Dollar Stores See Influx of Wealthy Consumers as Inflation Persists

For wealthier Americans, there’s no longer a stigma attached to shopping at the dollar store.

That’s according to a report Monday (June 19) by The Wall Street Journal, which finds that higher-income consumers flocked to stores like Dollar General and Five Below when inflation rose, and have stuck around as high prices persist.

For a long time, these consumers saw discount retailers as “not for them,” Michael Liersch, head of advice and planning at Wells Fargo, told the WSJ.

He added that while there was a time when it was fashionable in some circles to overspend, it’s now “about making the most of your money and not getting ripped off.”

The report cites figures from InMarket, which monitors foot traffic at retailers, showing an average increase of 4% since the second half of 2022 in the share of dollar-store visits among people making north of $100,000 per year.

And surveys from Morning Consult find that households with six-figure incomes are 15% more likely to say they’d patronize dollar stores than they were in June 2022.

Those numbers are in keeping with recent research by PYMNTS, which found that — as of the end of last year — 16% of higher earners were struggling to pay bills, while 34% lived paycheck to paycheck but had no issue paying their bills each month.

Two-thirds of 66% of households and individuals earning more than $100,000 annually have said they are cutting back on discretionary retail spending, with 55% reducing their nonessential grocery purchases. Overall, half of all $100,000-per-year earners say they live paycheck to paycheck, PYMNTS research has found.

These six-figure income consumers have also lowered their spending expectations when it comes to big purchases. Just 39% said that they planned to buy a new vehicle this year, while roughly the same percentages held true for expensive electronics and clothing purchases.

And this pinch has shown up in recent earnings reports. Walmart has seen a noticeable uptick in grocery spending from higher-income households.

“Share gains in grocery continued, including from higher-income households, as our strong price gaps resonate with customers who are increasingly prioritizing value and convenience,” Walmart Executive Vice President and Chief Financial Officer John David Rainey told analysts on an earnings call last month..

Big Lots reported that higher-income customers now make up more foot traffic than had been seen in the past.

“The fact that the $100,000-and-up crowd sees spending this year, overall, to grow 5%, the lowest level seen coming into the last few months of 2023, speaks volumes,” PYMNTS wrote earlier this month.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.