In a year marked by tariffs and many consumers tightening their budgets, one company stands out among numerous retailers for its decision to upgrade — rather than lower — its financial forecast. That company is Dollar General, the largest dollar-store chain in the United States. As reported on Tuesday, the company has seen a notable increase in consumer spending, with sales jumping by 2.4% from February through April compared to the same quarter last year.
The surge in sales can be attributed, in part, to shoppers opting for less expensive stores amid economic uncertainty. Historically, dollar stores tend to thrive during challenging economic times, as more consumers seek affordable shopping alternatives. Recent shifts in economic forecasts, prompted by fluctuating tariff rates on imports, have created a more cautious consumer landscape.
While Dollar General may consider raising prices due to tariffs, CEO Todd Vasos emphasized that this would be a last resort during an earnings call. He noted that the retailer is attracting a growing number of lower-income shoppers, alongside middle-income consumers actively seeking deals. Vasos revealed that nearly two-thirds of Dollar General's customers anticipate cutting back on spending, even for essential items, in the coming year. Additionally, a quarter of shoppers have indicated a reduction in their income this year, highlighting the tight consumer environment.
Major consumer brands, including Pepsi and Procter & Gamble, have raised concerns about declining consumer spending in the U.S. On Monday, Campbell's reported an increase in home cooking, leading to higher sales of its canned soups and sauces, rather than restaurant expenditures. The pressure on retailers to address tariffs carefully has intensified, as seen when President Trump criticized Walmart after the retail giant announced necessary price increases. In contrast, Target has attempted to downplay tariff-related price hikes while adjusting its financial outlook for the year.
On Tuesday, Dollar General forecasted a net sales growth between 3.7% and 4.7% for the fiscal year ending January 30, 2026. This projection is a 0.3% increase from previous expectations and reflects the chain's strategy to mitigate tariff-related costs. The company plans to encourage suppliers to absorb some of the cost increases, source cheaper substitute products, and consider alternative manufacturing locations.
Dollar General's revised forecast assumes that the current tariff rates — which have been temporarily reduced to 30% on Chinese imports — will remain stable through mid-August. While the retailer still imports a significant portion of its goods from China, Vasos has stated that efforts are underway to lessen the dependency on Chinese imports.
Following the announcement of its upgraded financial forecast, Dollar General's shares surged by more than 12%. This positive market response also benefited rival companies, with stocks for Five Below and Dollar Tree — which owns Family Dollar — experiencing increases as well. Both companies are expected to release their earnings reports on Wednesday, further contributing to the ongoing narrative of consumer behavior and retail strategies in a shifting economic landscape.
