More Wealthy Americans Are Shopping at the Dollar Stores
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Here's your money briefing for Wednesday, July 5th. I'm J.R. Whelan for The Wall Street Journal. High earners are continuing to shop at discount retailers such as Dollar General, Aldi Grocery Store and Five Below, even as inflation cools.
So this appears to be a shift that's sticking around. One of my sources was talking to me about how he sees lots of people driving Porsches, Mercedes and BMWs in the parking lot of the Aldi by his house now. And he pointed out that no matter how much you make, you don't want to spend $4 on an avocado when you can get one for $0.59.
We'll talk to WSJ Life and Work reporter Rachel Wolf about why one percenters are being drawn to these discount retail stores and what role social media has played in this trend. That's after the break.
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Discount chain stores are attracting a group of shoppers who don't normally scour the aisles looking for deals. Wealthy Americans. Wall Street Journal reporter Rachel Wolf joins us. So, Rachel, in your story, you write that high-earning Americans traditionally view discount stores as not for them.
What trend introduces wealthy Americans shopping at dollar and discount stores?
Why is that?
There are a few reasons, the biggest among them being that they didn't need to shop at the dollar store. There was also a stigma attached to places like the Dollar Tree, and we've been seeing that disappear.
So what tipped the scales in the other direction?
The biggest factor was inflation. No matter how much you make, nobody wants to pay $12 for a carton of raspberries.
Now, in your reporting, you spoke to several consumers who typically did not shop at discount stores in the past, but they do now. What do they tell you about that?
One of the consumers I spoke to told me that he grew up never shopping at the dollar store with his family. He just didn't think to ever go in there. There wasn't one by his house. But when one of his friends, another high earner like him, brought over a whole case of kombucha and told him that she had actually gotten it from the 99 cent store, he was shocked and decided to go himself and found so many good deals that now he says he goes once a week.
Now, besides offering good deals in the face of stubbornly high inflation, how have the discount stores like Dollar General and Dollar Tree and Aldi, how have they made changes that appeal to these higher income consumers?
So a big part of it has to do with where these shops are now located. Whereas in the past, somebody living in the suburbs might have to travel all the way downtown in order to find an Aldi. Now it's much more likely that there is one in their neighborhood, perhaps right across the street from where they might ordinarily get groceries.
Inflation has come down substantially compared to where it was a year ago. How has that changed shopping habits at discount stores?
Higher income consumers are continuing to shop at discount stores despite the fact that inflation has cooled. So this appears to be a shift that's sticking around. One of my sources was talking to me about how he sees lots of people driving Porsches, Mercedes, and BMWs in the parking lot of the Aldi by his house now.
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