Just a couple days ago, we noted, “investors may want to look at dollar store stocks, like Dollar General (DG) and Dollar Tree (DLTR). For one, both are recession-proof. And two, with inflation showing no signs of cooling off, dollar stores are attracting higher-income shoppers. In fact, management at Dollar General say consumers earning $100,000 per year are helping drive growth as a challenge like inflation bites into their spending power.”
At the time, DG traded at $230.61. It’s now up to $233.62 – and we’d like to see it closer to $250 shortly. As for Dollar Tree, it traded around $142. It’s now up to $148.21. While DLTR is pulling back at the moment, we’d still like to see the stock closer to $162.50, which would refill its bearish gap from late November 2022.
Interesting to note, according to CNN, “As inflation continues to push up the price of consumer goods, shoppers from higher income levels are starting to abandon their regular grocery store in favor of a new favorite: the dollar store. Dollar and discount stores exploded in the grueling aftermath of the Great Recession from 2007 to 2009. As unemployment grew during the financial crisis, shoppers swapped more expensive items from stores like Walmart for cheaper alternatives at discount stores.”
Sincerely,
Ian Cooper
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