Something unusual is happening at Dollar Tree: The discount chain said this week that of the 3 million new households that shopped at its stores in the third quarter, approximately 60% were from families earning more than $100,000 a year.
The trend highlights a deepening divide in the American economy. While accumulated inflation has raised prices by around 25% since 2020, wage growth has not kept pace for most families, leaving consumers of all income levels looking for opportunities and discounts.
“Higher-income families are flocking to Dollar Tree; lower-income families are depending on us more than ever,” Dollar Tree CEO Michael Creedon Jr. told analysts last week. The chain, based in Virginia, where 85% of the quarter’s sales were $2 or less, reported 4.2% sales growth compared to existing stores.
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Dollar General, the country’s largest dollar store chain with nearly 21,000 locations, reported similar dynamics in its own balance sheet this week. CEO Todd Vasos highlighted “disproportionate growth coming from higher-income households” in the third quarter, while sales rose 2.5% on a 2.5% increase in customer traffic. The company’s net profit increased 44%, to US$ 282.7 million.
Discount chain Five Below also raised its profit forecast for the rest of the year, driven by demand for affordable products and a weaker job market.
The change reflects what analysts describe as a “K”-shaped economy, in which wealthy Americans — benefiting from rising stock markets and rising asset values — continue to spend freely, while everyone else tightens their belts. According to an analysis by RBC Economics, the richest 10% to 20% drive consumption growth, while the remaining 80% have little financial reserves and are increasingly under pressure.
Kroger, the country’s largest supermarket chain, presented a similar picture in its balance sheet released on Thursday. CEO Ron Sargent told analysts that the company is “seeing a divide between income groups,” with spending by higher-income households remaining “strong,” while “middle-income customers are feeling increasing pressure, similar to what we have seen in lower-income households over the past few quarters.”
These consumers, Sargent added, are “making smaller, more frequent purchases to control their budget, and are reducing discretionary spending.”
Financial pressure shows up in credit data. American household debt hit a record $18.59 trillion in the third quarter of 2025, with credit card delinquencies rising to levels not seen since 2011. Meanwhile, annual inflation was at 3% in September, according to the Bureau of Labor Statistics.
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For dollar stores, the increase in wealthier customers represents both an opportunity and a challenge. At Dollar Tree, customer traffic actually fell 0.3% — the first drop since fiscal 2022 — even as new shoppers arrive, as higher-income families visit stores less frequently than the chain’s traditional demographic.
Dollar Tree was also forced to raise prices because of import tariffs, a process that Creedon acknowledged was a “necessary evil.” The company’s chief financial officer called this “tariff-related tagging activity.”
For this story, Fortune journalists used generative AI as a research tool. An editor checked the information for accuracy before publication.
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