Dollar General lifts sales forecast as inflation-hit Americans drive demand

[August 25, 2022]  (Reuters) - Dollar General Corp lifted its annual comparable sales forecast on Thursday, encouraged by Americans flocking to discount store chains for everything from groceries to household supplies in the face of higher inflation.  

A person exits a Dollar General store in Mount Rainier, Maryland, U.S., June 1, 2021. REUTERS/Erin Scott/File Photo

Discount stores tend to perform well amid an economic turmoil - as seen in the early months of the COVID-19 pandemic as well as the 2008 financial crisis - as cash-strapped consumers seek cheaper alternatives to ease the burden on their wallets.

Dollar General, which typically sells products for $10 or less, has cashed in on the surge in store traffic by doubling down on its fresh produce and frozen food offerings that has also helped the chain attract a slightly higher-income consumer cohort.

The company now expects fiscal 2022 same-store sales to rise 4% to 4.5%, compared with its prior forecast for 3% to 3.5% growth.

Dollar General said same-store sales rose 4.6% in the second quarter, beating analysts' estimate for a 3.9% increase, according to Refinitiv IBES data.

(Reporting by Deborah Sophia and Uday Sampath in Bengaluru; Editing by Maju Samuel)

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