Dollar General's Dirty Secret: It's NOT Inflation

Is Dollar General really a barometer for consumer sentiment? Sure, it's a retail giant with 20,000 stores and plenty of shoppers. But can it really pin its struggles on inflation and Trump-era tariffs?

The reality is that these stores have been virtual glorified junkyards for years. Customers might simply be fed up with navigating cluttered aisles and rummaging through disorganized piles of merchandise.

Management seems indifferent, and it shows. It's clearly a Dollar General culture, because every store looks exactly like the other. Consistency is one thing, but does every store have to look like a disaster zone? One can only assume that chaos is part of their literal brand strategy.

I mean, think about it. A brand new Dollar General opened up in our area—a fresh build from the ground up. Yet, on day one, it looked like it had always been there, neglected for decades: dirty floors, scattered products, unopened bins clogging the aisles.

It was remarkable—a deliberate effort, no doubt. This store layout screamed, loud and clear, "This is how we do things."

Beyond all of that, can anyone honestly claim Dollar General offers great prices? Sure, there are occasional deals, as with any store, but more often than not, their prices can be easily undercut on nearly every product.

If they had great deals, believe me, I'd walk out of there with bags full instead of just a couple of items. That never happens. 

Isn't the whole premise of Dollar General about saving money? In that sense, perhaps inflation does play a role. As wallets have tightened, shoppers simply become more conscious of what they are actually paying for things. Suddenly as buying power gets pushed to the brink, people walk into a Dollar General more aware than ever before and start thinking, "Wait a second—something's off."

Dollar General has been dodging accountability for years, pointing fingers instead of looking inward for solutions as customers drift away. That's part of their problem as much as anything is, really.

It makes you wonder—has the CEO ever stepped foot in one of those stores? And if he has, what's his reaction? "Fantastic work. This is exactly what customers want." Really? If Dollar General wants a turnaround, step one is simple: clean up the stores! Create a shopping experience that's pleasant, not frustrating. Do that, and maybe customers won't even mind the higher prices.

Take a page from Culver's or Chick-Fil-A, even though they operate an entirely different business. They're not the cheapest options in fast food, but they win with quality, service, and clean restaurants. It's clear they care about their business and their customer experience. Presentation matters.

I've said the same about Burger King. The issue isn't the food—it's the filthy, poorly managed restaurants that make customers cringe the moment they step inside.

If you want to win customers back, clean up your act—literally. An exciting new sandwich won't cut it if people dread walking in to get it.

This brings us back to Dollar General. The chaos isn't a fluke; it's clearly baked into their culture. How else could every single store in the chain achieve the same level of disarray? Not one manager, anywhere, thinks to break the mold?

I've joked that if I managed a Dollar General, my first move would be to clean, organize, and properly staff the store. Their first move? Fire me for breaking their "standard operating procedure."

It's not inflation, guys. Your stores are a freaking disaster!

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© 2025 Jim Bauer

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To the Fed I Say, "Not So Fast"

I am no economist, but I say, "Not so fast," on the idea of the Fed lowering interest rates just yet, even if there are some indications of some minor improvements in both the rate of inflation as well as certain jobs data.

Investors appear hopeful we may see the Fed rate lowered.

While we're closer to the desired 2% inflation rate, we're still much higher than that. Beyond that, what we experienced in this particular inflationary period while interest rates were higher was no real slowdown in consumer spending—something that is aimed for when the Fed raises rates. The idea is, of course, to at least stall the economy.

Part of the reason spending really didn't slow down all that much, I think, was due to a couple of factors, and perhaps a third one.

For one thing, while many jobs were impacted by the pandemic shutdowns, many people—in fact, the majority of workers—remained fully employed and earned paychecks. With less places to spend their earnings, people accumulated money that would have otherwise been spent. That money rested on the sidelines until things finally opened back up.

The second thing was that trillions of dollars were forced into the economy through relief checks to people and businesses. On top of that, unemployment benefits were extended for people impacted by Covid. In other words, while the economy itself had a stall during the pandemic, consumers were still largely cash rich. They were either stockpiling money or they were otherwise shored up by the government.

That left a lot of money on the table to be spent eventually and spend it consumers did when doors were once again open.

The third thing, I think, was a bit of what I am calling a "capitulation," of sorts. During that roughly two-year period it was miserable. No two ways about it. If you were spending, it was only on the essentials. With the lockdowns you couldn't really go anywhere. And even when it came to any shopping you could do there were massive supply chain disruptions which meant shelves were virtually left empty on many of the things we needed and wanted to buy.

Then came massive inflation, and I think people simply said, "Screw it." 

People not only wanted to get out when the economy opened back up for business. They needed to. And they were going to spend their money no matter what because they had the money to spend. Thus, through all of this, even while the Fed tried to slow people down, it just wasn't happening, and inflation continued despite the efforts of the Fed.

I do think we are finally seeing at least some indication that higher interest rates are beginning to take effect and help to reverse course. McDonald's and other fast-food chains recently reported a slowdown in sales for the first time in a long time. Consumer spending overall has slowed a bit.

The thing is, why lower rates now when things are just getting started? Let's get much closer to that 2% and then make a decision.

It's sort of the same reasoning that Biden's passage of the American Rescue Plan at a time when things were already opened back up and people began returning to work was simply wrong. It provided for prolonged issues in the supply chain and lead to massive labor shortages, both of which contributed largely to a lot of the inflation we are experiencing now.

It was simply the wrong time to infuse more money into the economy when it really didn't need it.

It's not to say that even if the Fed lowers the rate nominally, say 25 basis points, that consumers will go wild and return to normal spending levels right away. But I think the better idea is to wait until not only we get to the desired 2%, but we stay there for a little while. Then we lower the rates.

Today we will hear comments from New York Fed President John Williams and Richmond Fed President Tom Barkin that should at least provide for a better idea as to what moves the Fed will make in the near term.

I am hoping they indicate that for now we're going to sit tight.

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Lower Gas Prices Will Spike The Economy

When it comes to oil, as a general rule, there is one big factor that I consider. Oil is deeply embedded in the entire United States economy. For that reason, when oil prices, and especially prices at the pump, reach new low levels, I think the overall impact on the economy is potentially great.

This becomes more pronounced when we think about how much of a negative impact high gas prices have had on the average American family in the past five or so years. Pumping up to get to point B drains spendable cash from the pockets of consumers, and this has an effect on the entire economy. Especially where discretionary spending is concerned. But let's not forget that all of the products we buy must get to point B as well, and much of that transport of goods happens using gas.

It is uncertain how long gas prices, or the price of oil in general, will remain lower. But at least in the short term, the impact of low gas prices in the economy could help to lift up many companies that would be direct beneficiaries of the decline in oil prices.

Those would be the places where discretionary money would most likely be spent.

Companies to look at to invest in the decline in oil prices? Retail outlets, especially those that are a step above stores like Walmart, The Dollar Tree, Family Dollar, and Dollar General. Starbucks is definitely one place that could see more customers willing to spend some of their newfound extra cash on a cup of premium coffee. Restaurants and entertainment venues will fare well as well.

Of course, all of this fresh cash entering the overall economy will have another effect as well. That is, it will help to bolster demand, and that of course can lead to more jobs. Even if oil prices ramp up again, ideally more Americans will be back to work, and the economy will better be able to sustain itself going forward. This recent decline in oil prices, if you ask me, is at the right time, and just what the doctor ordered.