Dollar General CEO Warns Even “Upper-Middle Acting Like Lower-Income” Amid Fuel Crisis

Speaking at Goldman Sachs’ 33rd Annual Global Retailing Conference on Tuesday morning, Dollar General CEO Todd Vasos offered a downbeat assessment of its customer base, warning that financial stress is spreading up the income ladder to middle- and upper-middle-income households.

Years of elevated prices for everyday goods, compounded by gasoline prices above $4 a gallon nationally and $6 a gallon for diesel, are certaintly reshaping consumer habits across income cohorts. Vasos said that even customers earning $100,000 or more, whom Dollar General classifies as higher income, are increasingly under stress.

Vasos explained:

And we’ve always said here at Dollar General for our core customer that any time that gas prices get anywhere close to four and then crests $4 a gallon, the customer changes their their shopping behavior, stays closer to home normally shops more often, but buys less on each occasion.

And that’s exactly what the core customer is faring. But the interesting thing with this economy, because of the other sustained headwinds of inflation over the years that have passed, even that middle to upper middle is acting more like a lower income shopper these days. And they had that same characteristic. And then high income for us is that that $100,000 plus crowd.

The CEO of Dollar General, which has more than 21,000 stores nationwide, offers a real-time snapshot of consumer spending patterns and sentiment.

On Monday, Jefferies food analyst Scott Marks also flagged new pressure on convenience store customers as gasoline and diesel prices soared in August.

All of this highlights the Trump administration’s urgent search for energy price relief ahead of the midterms. Export restrictions on diesel entered the conversation earlier today with Senate Majority Leader John Thune. The administration is also considering measures to increase U.S. refining capacity (yet capacity is at 98%). Whether Trump officials will suspend federal fuel taxes remains to be seen.