A growing number of higher-income American shoppers are turning to discount chains like Dollar Tree and Dollar General, a clear signal that economic uncertainty and trade tensions are rippling across the lower-end of affluent consumer segments once considered immune to frugality.
As U.S. trade policy remains volatile and tariffs push costs higher, households earning over $100,000 are increasingly seeking value. Dollar Tree’s CEO recently highlighted that affluent shoppers have become a “meaningful growth driver,” noting a notable increase in visits from this demographic. Same-store sales at Dollar Tree rose 5.4% in Q1, with gains seen across all income brackets.
Dollar General echoed similar trends. CEO Todd Vasos said the chain saw the highest percentage of trade-in customers in four years during Q1, including middle- and high-income shoppers abandoning traditional retailers for lower prices. The company posted a 3.4% increase in same-store sales.
This migration toward dollar stores coincides with key tariff implementations, suggesting that trade tensions may be influencing consumer behavior in real time. Foot traffic at both chains spiked in April, a period that aligned with new tariff measures.
Confidence Wavers as Consumers Pull Back
Behind this shift lies growing anxiety about the broader economy. A recent ADP report showed U.S. private payroll growth slowing significantly, pointing to hiring hesitancy rather than collapse. Consumer confidence, though slightly up in May, remains fragile after months of decline.
PwC’s Ali Furman noted that shoppers are becoming more selective, focusing on “discerning purchases” as inflation and policy uncertainty weigh on sentiment. Even Walmart has seen increased visits from wealthier customers, further underscoring how price sensitivity is creeping up the income scale.
Discount Chains Thrive in Uncertain Times — but at a Cost
While discount retailers often outperform during downturns, the trade war brings mixed consequences. Dollar General, with most of its sales rooted in U.S.-made food products, has lower exposure to import tariffs. Less than 10% of its goods are directly imported, and only a fraction of that comes from China.
Dollar Tree, by contrast, is more vulnerable. Roughly 41%-43% of its retail purchases are direct imports, with China being the dominant source. The company’s stock dropped as much as 10% after warning of profit pressures from tariff-related cost increases. Adjusted Q2 earnings are now expected to decline by as much as 50% year-over-year, though a rebound is forecast for later in the year.
Still, strong consumer traffic offers hope. Dollar Tree anticipates same-store sales will land at the high end of its 3%-5% full-year guidance, despite headwinds from tariffs and its ongoing divestiture of Family Dollar.
The Bigger Picture: A Shifting Retail Landscape
The changing dynamics in consumer behavior, especially among affluent households, highlight how economic anxieties and trade policies are reshaping retail patterns. Dollar stores, traditionally reliant on low-income demographics, are becoming bellwethers for broader economic unease.
Year to date, shares of Dollar General and Dollar Tree are up 45% and 18%, respectively, outpacing both the S&P 500 and larger retailers like Walmart and Target. But over the past year, both have underperformed, each falling more than 20% as margin pressures and strategic shifts play out.
In an economy where tariffs “give and take,” the resilience of U.S. consumers, and where they choose to spend, may become one of the clearest indicators of where the trade war is truly hitting home.