Dollar and General Merchandise Stores NAICS 455219

May 22, 2025 - Average Growth Expected

• Sales for the US dollar and general merchandise stores industry are projected to grow at a 4.2% CAGR from 2025 to 2029, comparable to the overall economy's projected growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The retail and wholesale sectors are driven by consumer spending, along with expenditure by businesses and the government. Consumer sentiment is expected to improve in the forecast period, which bodes well for the sector. The forecast said retail spending could soften with the growth of spending on consumer services. A factor that may limit consumer spending is higher tariffs on consumer goods. Lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. Real income could suffer if prices rise due to tariff implementation.
• Dollar Tree recently announced it was selling off its Family Dollar brand to private equity groups Brigade Capital Management and Macellum Capital Management in a $1 billion deal, according to CNN Business. The deal is expected to close in the second quarter of 2025. Dollar Tree had acquired Family Dollar in 2015 for $9 billion, but the banner consistently underperformed due in part to overexpansion and steep competition from larger discount retailers such as Walmart. In recent years, the company closed nearly 1,000 Family Dollar stores following a store portfolio optimization review of market conditions and individual store performance.

• Dollar and discount stores anticipate that core customers will curb their shopping expenditures in 2025 due to inflation and uncertainty from new Trump administration tariffs on Chinese and other goods. According to Dollar General CEO Todd Vasos in a March earnings call reported by CNBC, “Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation. Many of our customers report they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities.” Most discount retailers import many of their goods. Dollar General had to raise some prices when Trump imposed tariffs during his first term in office. According to Fast Company, Five Below imports 60% of its goods from China and expects to raise prices on some items that cost below $5 to offset tariff costs.
• Consumer confidence levels fell in April 2025 month over month, dropping by 7.9 points, according to the Consumer Confidence Index from the Conference Board. Consumer confidence levels have fallen for five consecutive months, reaching levels not seen since the beginning of the COVID pandemic, according to The Conference Board, which publishes the monthly index. In addition, the final index of consumer sentiment from the University of Michigan dropped 8% in April 2025 from the previous month, according to CFO Dive. An index measuring consumers’ expectations for the future fell nearly a third since January, the steepest three-month percentage decline since the 1990 recession. According to survey director Joanne Hsu, “Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.”