Dollar Tree’s CEO said with extra unemployment benefits expiring and higher unemployment rates, it is expecting more consumers to shop at its stores. Shoppers outside a Dollar Tree store in Chicago in May.

Photo: Nam Y. Huh/Associated Press

Dollar General Corp. DG -1.35% and Dollar Tree Inc. DLTR -7.21% are aiming to draw in new consumers who are freshly scrutinizing their spending amid higher unemployment caused by the Covid-19 pandemic.

The rival discount retail chains on Thursday both reported stronger demand for their latest quarters, performances helped along by $600-a-week federal unemployment checks, a benefit that expired last month. Dollar General said comparable quarterly sales rose about 19%, while Dollar Tree, which operates Dollar Tree and Family Dollar stores, said those sales increased 7%.

The expiration of the higher federal benefit last month and delays tied to its replacement pose a challenge for the companies. But executives from both Dollar General and Dollar Tree said they are preparing to serve shoppers who are looking for deals and lower-priced merchandise during a period of economic weakness.

“We can see that we’re getting a trade-down at a pretty good clip,” Dollar General Chief Executive Todd Vasos said on a call about quarterly results. “As we continue to watch this evolve, what we see is very reminiscent of what we saw during the Great Recession.”

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