One-Percenters Keep Shopping at the Dollar Store

That Mercedes in the dollar-store parking lot isn’t an illusion.

High-earners joined the rest of the country in flooding discount retailers such as Dollar General, Aldi grocery store and Five Below as prices for food and staples rose. Now, with inflation at half its peak, they aren’t letting up.

InMarket, which tracks retailer foot traffic, measured a 4% average increase in the share of dollar-store visits this year among those making more than $100,000, compared with the second half of 2022. Households with six-figure incomes are 15% more likely to say they would shop at dollar stores than they were last June, going from 39% to 45%, according to daily surveys from Morning Consult of about 50,000 Americans.

Wealthy Americans long viewed discount stores as “not for them,” says Michael Liersch, who consults with high-net-worth individuals as head of advice and planning at Wells Fargo. Yet paying $8 for a carton of eggs struck even many affluent people as ridiculous.

Overspending on things was once fashionable for some, Liersch says. “These days, it’s about making the most of your money and not getting ripped off.”

No matter how much you make, consumers say, there is no longer a stigma in going after a good deal.

Cheap kombucha

Autry Liggett, who works in operations for a Santa Barbara, Calif., hedge fund, exclusively shopped at Whole Foods and other high-end chains for groceries and household goods until recently. Growing up, he says he looked down on what he saw as poor-quality products at discount retailers.

Then, one of his friends brought over a case of 99-cent-store kombucha and probiotic drinks a few months ago. “She makes good money, so I just assumed she also shopped at Whole Foods and the other places I shop,” he says. “I was shocked.”

He now pops into the 99 Cents Only store downtown at least once a week, making sure to visit on Tuesday or Thursday, when they restock, for the best selection. He recently bought vitamins that retail at Whole Foods for $25 for $1.99, and a pint of organic blueberries for 99 cents.

A Dollar General spokeswoman says the brand has attracted and retained higher-income customers lately. A recently updated fresh-produce section, now available in nearly 3,900 stores, might be bringing more customers in.

Plenty of wealthy people point out that they got that way partly by not overspending on the small stuff—especially when it is all the same stuff.

“A carrot is a carrot is a carrot,” says Morgan Pierce, who earns about $200,000 a year working at McDonald’s Chicago corporate office. She frequently hits up Aldi and her local dollar store for groceries and other staples. Her last birthday party featured a private chef—and $1 plates and decorations.

Pierce, who was quick to tell her guests where many of the party supplies came from, says people were impressed. It is a shift from how she felt as a child, when she questioned why her family always had to hunt for sales. Now, she says she realises her mom has always been a bargain hound.

“Not everything on the shelves is well-made, but there are things that are, and I am not ashamed to go into those places and get them, and I’m not afraid to tell people about it,” Pierce says.

Bob Gillman, an executive transition consultant, has shopped at Aldi and other discount chains for decades. He didn’t mention the habit to his friends until recently, when a branch popped up near his tony Palm Springs, Calif., community.

“We see lots of people driving Porsches, Mercedes and BMWs in the parking lot,” Gillman says. “No matter how much you make, you don’t want to spend $4 on an avocado when you can get one for 59 cents.”

Few seem to mind feeding a quarter to check out a shopping cart, or bagging their own groceries, Gillman says.

Gillman’s daughter, Rachel Gillman Rischall, often rolled her eyes at her dad’s zealous discount shopping. That is, until this past year, when her grocery bills soared, and birthday-party gifts for her kids’ friends topped $50 a pop near her Chicago home. Fed up, she checked out the toy selection at Five Below and hasn’t looked back. She also now buys journals, art supplies, stationery and snacks there.

“My dad is so proud,” she says.

Shopping at dollar stores is a choice for some, yet it is a necessity for many, and Americans increasingly get their groceries from these retailers.

Expanding into more-prosperous areas is part of Aldi’s strategy, analysts say. The retailer plans to add 120 new U.S. stores in 2023, after opening and remodelling 139 stores last year. The brand says it attracted 9.4 million new U.S. customers in 2022.

Budget influence

Social media is also helping make dollar and discount stores cool. Videos tagged #dollartree have a combined 7.6 billion views on TikTok. Many feature influencers trying out what are known as dupes of popular high-end beauty products and other goods.

Entrepreneur Bethenny Frankel says her discount and drugstore hauls have attracted more attention than anything she did when she was featured on the reality show “The Real Housewives of New York City.”

“I go in there with my Hermès bag,” says Frankel, whose YouTube and TikTok videos shopping at dollar stores and unboxing ultra cheap products regularly ring up millions of views. She says she isn’t paid by any of the discount chains for her videos.

While some viewers have accused her of pretending to like and use a $1 lip gloss or storage bin when she could easily afford its more expensive counterpart, Frankel says her enthusiasm is genuine.

“What’s the difference between a dollar-store and a $20 pair of flip flops? Is there such a thing as truffle-oil-infused rubber?” she says. Lip gloss, meanwhile, “stays on for five minutes no matter how much you spend.”

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

One-Percenters Keep Shopping at the Dollar Store

Wealthy consumers scour discount-chain aisles for bargains

Cheap kombucha

Budget influence

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.