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Family Dollar posts 7% increase in net income as shoppers flock there

Family Dollar Stores, Inc. (NYSE: FDO), along with the other dollar stores, may begin to see many more non-traditional customers who are aching to save every penny in the face of increasing energy and food costs. The first strike at that concept was from Family Dollar, which reported a 7.1% increase in net income for its latest quarter.

While sales grew at Family Dollar, stores that target affluent or higher-income shoppers saw flat or negative growth. This all points to one thing: customers are seeking out bargains wherever they can to offset rising prices in other areas of their lives. This sounds like it should have happened last summer as the credit freeze was beginning, but with summer in full swing and gas prices at $4 a gallon levels, the reality of the dollar store is setting in for millions of Americans.

With the typical Family Dollar customer being the "mom who makes less than $30,000 per year," it's not hard to imagine all the dollar-type retailers starting to see increasing fortunes in the near future. Every worker in the U.S. who drives has easily seen their last performance increase fade away. In fact, many have actually experienced a large financial demotion due to high gas prices and food costs. It's hard to think of it that way for many, but that is what it is. Inflation and energy costs can wipe out that raise pretty fast, yes? With that in mind, you may want to venture into a dollar store soon. Most likely, you'll be pleased with the price levels you find on almost every product.

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Last updated: August 27, 2008: 09:27 PM

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