U.S. consumption polarization deepens, even the $100 million-a-year middle class turns to Dollar General

what is Dollar General, America's Daiso

in the United States, there is a clear divide in the retailers that different income groups shop at, with the lower income groups tending to shop at dollar stores, which use low prices as a weapon.

if Korea has Daiso, the US has Dollar General and Dollar Tree. dollar General is mainly located in rural areas or small towns, attracting consumers with cheap household goods and groceries. dollar Tree, on the other hand, has stores in cities and sells cheap party supplies and impulse buys.

the secret to Dollar General's low prices is that it builds stores in areas with low land prices and minimizes its investment in interiors. In fact, the average consumer who shops at Dollar General has a median income of about $45,000, which is about $65,000 of our money. considering that the median U.S. household income is $80,000 and fast food store managers make over $100,000 a year, it's definitely a store that caters to lower-income people.

low-income Americans buying less stuff

inflation and rising food prices, which began in the second half of 2023, have put a financial strain on many Americans. in a country that used to be known for cheap beef, even McDonald's hamburgers are now so expensive that even low-income people say they can't afford them.

when people need to cut back on living expenses, the first thing they do is try to substitute products. but for low-income Americans, there's no room for substitution because they're already buying the cheapest product available - Dollar General is already the cheapest, and that's what they're used to.

so they're cutting back on their purchases, going from buying once a week to once every two weeks, and so on. We're seeing a fundamental shift in the consumption patterns of low-income Americans.

consumption polarization at the expense of the middle class

here's where the reversal occurs. the American middle class is starting to flow into Dollar General.

an annual income of $80,000 is the median household income in the US. that's over 100 million in our money, but it's hard to live comfortably on that income in the U.S. Inflation has hit this middle class hard.

the middle class's response has been to substitute goods. instead of going to Walmart and Kroger, they started going to Dollar General because they could get cheaper goods at Dollar General, even though Walmart and Kroger are discount stores.

dollar General, which was originally targeted at low-income people, has now expanded its customer base to include the middle class, further polarizing American consumption. the lines between low, middle, and high-income consumers are blurring.

looking ahead and implications

while inflation has calmed down somewhat, food prices are still rising. this is because Trump's tariff policies are having a major impact on U.S. food prices. The middle class's generalized access to the dollar is likely to continue for some time.

on the other hand, high-income earners are less affected by rising food prices and are maintaining their consumption patterns. this is further polarizing US consumption. as the lines between low-income and middle-class are blurring, the consumer market is becoming more bifurcated.

as this polarization continues, consumer discontent is bound to build, and it will have an impact on American society and politics.

frequently Asked Questions

Q1. What kind of store is Dollar General?

A. Dollar General is a low-cost retail chain located primarily in rural and small towns in the United States. it sells inexpensive household goods and groceries and serves as a similar role to Daiso in Korea.

Q2. What caused the polarization of US consumption?

A. Inflation and rising food prices since 2023 are the main causes. the boundaries of the consumer class are breaking down, with lower-income people cutting back on spending and the middle class moving to lower-priced stores.

Q3. Is the US middle class struggling to make ends meet?

A. The median household income in the U.S. is $80,000 per year, which is about 100 million won in Korean money, but it is difficult to live comfortably considering the high cost of living in the U.S. The middle class is also under pressure, especially after inflation.

Q4. How does the Trump tariff policy affect consumption?

A. The Trump tariff policy is having a direct impact on the rising prices of imported food. this has resulted in food prices not being easily stabilized, perpetuating the polarization of consumption.

key takeaway

u.S. consumption polarization is intensifying as inflation and rising food prices drive the middle class to lower-priced stores, heralding major changes in the U.S. economy and society.

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