Dollar Tree has revealed that of the 3 million new households that shopped its stores in the third quarter, roughly 60% earned more than $100,000 a year.
The surge is a striking indicator of how deeply inflation has reshaped consumer behavior in the United States.
The shift shows that even higher-income Americans are now seeking lower prices as cumulative inflation has pushed costs up around 25% since 2020, while wage growth has failed to keep pace for most households.
“Higher-income households are trading into Dollar Tree; lower-income households are depending on us more than ever,” CEO Michael Creedon Jr. told analysts.
The chain, where 85% of sales were priced at $2 or less, reported a 4.2% increase in same-store sales for the quarter.
Dollar General, Five Below Report Similar Patterns
Dollar General echoed the trend in its own quarterly results.
CEO Todd Vasos said the company saw “disproportionate growth coming from higher-income households.”
Same-store sales rose 2.5% on a matching 2.5% increase in customer traffic, while net profit jumped 44% to $282.7 million.
Five Below also raised its profit outlook for the year, crediting strong demand for discount goods amid a softening labor market.
U.S. Is Now a “K-Shaped” Economy
Economists describe the shift as evidence of a “K-shaped” economy: affluent households continue spending thanks to stock market gains and asset appreciation, while the bottom 80% face increasing financial strain.
An RBC Economics analysis found that the top 10%–20% of earners are driving consumption growth, while most households have limited savings and little cushion against rising prices.
Kroger Sees the Same Divide in Grocery Spending
Kroger CEO Ron Sargent told analysts the supermarket giant is “seeing a split across income groups,” with high earners maintaining “strong” spending while middle-income shoppers are now under pressure similar to lower-income customers.
Sargent said these consumers are “making smaller, more frequent trips to manage budgets, and they are cutting back on discretionary purchases.”
Household Debt Hits Record High as Inflation Persists
The broader financial picture continues to worsen for many families.
U.S. household debt rose to a record $18.59 trillion in the third quarter of 2025, with credit card delinquencies reaching levels not recorded since 2011.
Inflation stood at 3% in September, according to the Bureau of Labor Statistics.
Dollar Tree Faces New Pressures Despite Higher-Income Customers
Even with new shoppers coming in, Dollar Tree reported a 0.3% decline in traffic, its first drop since 2022, because wealthier households visit less frequently than its core customer base.
The company is also battling rising costs from tariffs, which have forced price increases.
Creedon called the hikes a “necessary evil,” and the company’s CFO referred to the process as “tariff-related stickering activities.”
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