Dollar General Makes Significant Change to Win Back Customers

Dollar General, one of the largest discount retail chains in the United States with over 20,000 stores, is seeing a concerning shift in customer behavior amidst persistent economic pressure.

Knewz.com has learned that although the company reported a modest 2.4% year-over-year increase in same-store sales in its first-quarter earnings report for 2025, deeper analysis revealed stagnation in store traffic and rising strain among its low-income shopper base.

Core Customers Under Financial Pressure

During an earnings call in June, Dollar General CEO Todd Vasos laid out the economic challenges affecting its core customers. “During our recent customer survey work, 25% of DG customers reported having less income than they did a year ago, and nearly 60% of our core customers noted that they felt the need to sacrifice on necessities in the coming year,” he said in a statement.

“While our core customer remains financially constrained, we have seen increased trade in activity from both middle- and higher-income customers,” he added. These findings reflect broader economic pressures facing low-income households, including inflation and stagnant wages.

Tariffs Could Further Impact Consumer Spending

Vasos added that President Donald Trump’s sweeping tariffs could further impact consumer spending, as the trade policy could result in higher prices in Dollar General stores. “The tariff landscape remains dynamic and uncertain, and there is a higher degree of variability in potential outcomes around tariff-related impacts, including on consumer spending, cost of goods, and the supply chain,” he said. According to a survey by the market research firm Numerator, 88% of consumers are concerned about the impact of tariffs, while 64% are worried that tariffs will raise prices on everyday goods.

Furthermore, 81% of consumers are reportedly adjusting their shopping habits in response to tariffs, including delaying nonessential or expensive purchases, buying fewer imported goods, searching for sales and coupons and switching to shopping at lower-priced retailers and discount stores.

Dollar General Faces ‘Major Boycott’ from Consumers, Amidst Other Market Threats

It has further been reported that Dollar General is facing a major boycott from consumers for cutting its diversity, equity and inclusion policies. Furthermore, Target, one of its top competitors, decided to make back-to-school shopping “more affordable” for consumers by “maintaining last year’s prices on must-have supplies,” according to reports. Target also kept more than 1,000 back-to-school items under $5 and plans to roll out further discounts for students and teachers through its Target Circle app, further heightening competition in the discount retail space. Amid economic headwinds, rising concerns over tariffs, and shifting consumer loyalty, Dollar General is betting that sharp discounts and targeted promotions will stabilize its business.

Dollar General Makes Bold Move to Win Customers Back

In response to these pressures, Dollar General has announced that it is cutting prices on over 1,000 essential items for the entire summer after it previously reduced prices on 200 products. In a recent press release, Dollar General said the price cuts will impact 40% of the items in categories such as “food, health, and wellness products, beauty and personal care items, and household cleaning supplies.”

In addition, the retail chain launched its “7 Days of Savings” sales event, which offered customers discounts of up to 50% off one featured item each day between July 6 and July 12. “With kids home from school, there’s often additional meal prep and a desire for additional activities… Our discount offers are designed to enhance affordability on the items our customers need and want,” said Chief Merchandising Officer Emily Taylor. According to reports, Dollar General will also offer back-to-school deals this summer, such as 30% off digital coupons for teachers, and customers can also expect summer promotions that include weekday $5 off $25 digital coupons.

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