Dollar Tree is experiencing something out of the ordinary: The discount chain announced this week that of the 3 million new households patronizing its establishments during the third quarter, roughly 60% of these recent patrons originated from households earning more than $100,000 a year.
TL;DR
- Dollar Tree sees 60% of new patrons earning over $100,000 annually, indicating an economic split.
- Higher-income households are trading into discount stores, while lower-income households depend on them more.
- Kroger and Dollar General also report a split, with affluent customers spending strongly and others facing pressure.
- Rising inflation and debt are stretching consumers, leading to smaller trips and reduced discretionary spending.
The trend underscores a deepening split in the American economy. While cumulative inflation has pushed prices up roughly 25% since 2020, wage growth has not kept pace for most households, leaving consumers across the income spectrum hunting for deals.
“Higher income households are trading into Dollar Tree, lower-income households are depending on us more than ever,” Dollar Tree CEO Michael Creedon Jr. Told analysts on Wednesday. The Virginia-based chain, where 85% of sales during the quarter were priced at $2 or less, reported same-store sales growth of 4.2%.
Dollar General, the country's leading dollar-store operator boasting approximately 21,000 outlets, shared comparable trends in its recent financial statement. CEO Todd Vasos noted “disproportionate growth coming from higher-income households” during the third quarter, with comparable store sales experiencing a 2.5% upswing driven by a 2.5% surge in shopper visits. The firm's net earnings saw a 44% jump, reaching $282.7 million. The discount retail enterprise Five Below also raised its profit outlook for the remainder of the year, bolstered by consumer interest in affordable products and a less robust employment landscape.
The shift reflects what analysts describe as a “K-shaped” economy, where wealthy Americans—buoyed by stock market gains and appreciating assets—continue spending freely while everyone else tightens their belts. According to an RBC Economics analysis, the top 10% to 20% of income earners are driving consumption growth, while the bottom 80% have minimal financial reserves and are increasingly stretched thin.
Kroger, the nation’s largest supermarket chain, painted a similar picture in its earnings report Thursday. CEO Ron Sargent told analysts the company is “seeing a split across income groups,” with spending from higher-income households remaining “strong” while “middle-income customers are feeling increased pressure, similar to what we’ve seen from lower-income households over the past several quarters.”
Those shoppers, Sargent further noted, are “making smaller, more frequent trips to manage budgets and they are cutting back on discretionary purchases.”
Financial difficulties are becoming evident in credit information. U.S. Household debt hit a record $18.59 trillion during the third quarter of 2025, as credit card defaults escalated to figures not observed since 2011. Concurrently, the yearly inflation percentage was 3% in September, according to the Bureau of Labor Statistics.
The arrival of more affluent customers poses both a chance and a difficulty for discount retailers. At Dollar Tree, customer visits actually decreased by 0.3%, marking the initial drop since fiscal 2022, despite the retailer attracting new patrons, as more affluent households shop less often compared to the brand's typical clientele.
Dollar Tree has also been compelled to increase its prices owing to tariffs, a transition that Creedon admitted was a “necessary evil.” The company's chief financial officer referred to it as “tariff-related stickering activities.”
For this story, Coins2Day news reporters employed AI that creates content as a means to investigate. An editorial staff member confirmed the correctness of the details prior to its release.
