With sky-high inflation, and growing signs of recession, more people are shopping at dollar stores, like Dollar Tree (DLTR).
For one, according to CNBC, “As of June, 61% of Americans — roughly 157 million adults —lived paycheck to paycheck, according to a new LendingClub report. That’s up from 58% who reported living paycheck to paycheck in May. A year ago, the number of adults who felt stretched too thin was 55%.”
Two, according to The Wall Street Journal, “One way they are doing so is by relying more on dollar and discount stores for groceries. Average spending on grocery products at discount chains increased 71% from October 2021 to June 2022, according to analytics firm InMarket. Over that time period, spending on the same items in grocery stores decreased by 5%. Many large consumer brands—including Walmart and Unilever—attest that their prices aren’t going down any time soon.”
Until things change for the better, dollar stores, like DLTR could benefit.
Technically, after gapping from $175 to $155, DLTR is coming back strong. From a current price of $166.69, we’d like to see the stock again challenge $175, nears-term.