Big retail players Dick’s Sporting Goods (DKS) and Dollar Tree (DLTR) both reported earnings on Wednesday, giving more insight into the current consumer landscape. In the earnings release, Dollar Tree CEO Rick Dreiling attributed the discount retailer’s performance to “immense pressures from a challenging macro environment.”
LSEG Director of Consumer Research Jharonne Martis joins Catalysts to give insight into the current state of the consumer and what it signals for the broader retail landscape.
“The consumer is definitely very value-oriented and that’s the most critical thing for them, and it’s not just the low-end consumer. What we saw with today’s numbers, also the middle-class consumer, they’re thinking twice about any expenditures over $1,000 and even thinking twice about now opening up more credit or financing anything that’s a big purchase,” Martis says.
Martis notes that dollar stores Dollar Tree, Family Dollar, and Dollar General (DG) “have all lost market share also to the big box retailers like Walmart (WMT).”
“So in the past, it used to be that consumers used to go into a Walmart and they only stuck to those groceries, primarily groceries But, now, since the pandemic, Walmart has gained more customers, they’ve increased their selection to those everyday low price items,” Martis explains. “So as a result, these new customers that are coming now to Walmart are not just only buying groceries, but then they’re also picking up these discretionary items and therefore the dollar stores are losing those market shares.”
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This post was written by Nicholas Jacobino
