MW Dollar General says customers are buying less food because driving is too expensive

By Bill Peters

'This pressure has been more pronounced on customers in rural communities as they work to minimize trip distance,' discount retailer's CEO says

Dollar General reported quarterly results on Tuesday.

As the Iran war drives up gas prices, retailers like Walmart have said consumers are buying less gas per trip to the pump. Now, signs are emerging that lower-income and rural shoppers are buying less food - in part because long drives are getting too expensive.

Discount chain Dollar General $(DG)$, which draws a lot of lower-income consumers who have been hit harder by the past several years of inflation, said Tuesday that as average gas prices have climbed above $4 a gallon, more of its core shoppers are pulling back.

"During the quarter, many of our core customers reported cutting back on other household expenses, including food purchases, due to rising gas prices," Dollar General CEO Todd Vasos said on the chain's first-quarter earnings call Tuesday.

"This pressure has been more pronounced on customers in rural communities as they work to minimize trip distance and make trade-offs in their search for everyday affordability and value," he added.

Vasos said that any tax benefits, like the higher refunds expected for many consumers this year due to policy changes, had been neutralized by the higher gas prices as well as cuts to federal SNAP benefits. But he said SNAP recipients were spending more of their money at the dollar-store chain.

Meanwhile, wealthier consumers looking for relief from the fuel-price squeeze have dropped by Dollar General stores more frequently. The company said the biggest increase in its customer count came from households making more than $100,000 annually.

"When that [gas] price hits that $4 mark and then crosses it and then sustains for a while, you start to see that trade-in come in and you start to see that our core customer needs us most," Vasos said. "This is exactly what's happening."

As the Iran conflict strains global supply chains, prices for oil (CL00) (BRN00) and within industries that use oil - from transportation to plastics - have risen. Walmart $(WMT)$ has warned that prices for its products could go higher if gas prices stay elevated. It also has warned that if gas prices go above $5 a gallon, it could lead to a significant pullback in demand.

Walmart, which runs a lot of gas stations, said last month that the average number of gallons that shoppers put in their vehicles had fallen below 10 for the first time since 2022, when Russia's invasion of Ukraine led to a spike in gas prices.

However, Costco Wholesale $(COST)$ said last week that demand at its gas stations had hit record levels as people look for cheaper fuel options. And it said its customers were topping off more frequently because they were worried about further increases in gas prices.

Dollar General on Tuesday reported mixed first-quarter results but raised its profit outlook. Its shares were flat in extended trading Tuesday after falling 3.3% in the regular session, while the stock is down 20% so far this year.

The chain said first-quarter revenue rose 3.4% to $10.79 billion, below FactSet analyst forecasts for $10.81 billion. Same-store sales rose 2%, in line with Wall Street's estimates. Dollar General earned $2 a share during the quarter, above estimates for $1.89.

The company raised its full-year earnings-per-share outlook to a range of $7.20 to $7.45, versus prior expectations for $7.10 to $7.35.

-Bill Peters

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June 02, 2026 16:40 ET (20:40 GMT)

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