Shortly after 1pm ET, the shares of Dollar General and Dollar Tree tumbled after it was unveiled that President Donald Trump's budget was proposing to effectively abandon food stamps, slashing the program's traditional cash payments and substituting them with packages of "100% American grown food" for recipients. According to Bloomberg, this would represent "one of the biggest shakeups of the US food stamp program in its five decade history."
The reason why deep discount dollar chains were sold off on the news is because they are particularly vulnerable to changes in the food stamp program as they largely cater to less affluent shoppers:
according to Gordon Haskett Research Advisors, Dollar General and Dollar Tree have signaled that food stamps account for roughly 5 percent of sales. Shares of Dollar Tree fell as much as 3.7% to $103.68, while Dollar General was down 5% to $93.48, the declines wiping out gains by the two companies in 2018.
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Just a bit of personal experience. There is a restaurant I love to eat at. No, it is just a restaurant and no I won’t say the name. But when you pay with a debit card the charge comes through as XYZ Grocery Store. How many meals do you think are paid for with an EBT food card. That money is to be used to buy food for families, not eat in restaurants.
ReplyDeleteBadger
Precisely and one of my pet peeves....that and the people who show up for free food from the charity houses in their $40K SUV's.
DeleteOh my god! What is going to happen to Doritos and Grape soda sales?
ReplyDeleteGood one!
DeleteKeep in mind as well, like so many of our social welfare programs, that have spun out of control, Food Stamps was meant to be Temporary. A short term fix until you were able to provide for yourself again.
ReplyDeleteBut leave to a Democrat/SJW to find some way to whine, bitch & complain that giving people food instead of food stamps is some how racist, sexist and a form of discrimination. Some Liberal/Socialist judge will come up with a pretzel logic reason that people have a right to spend food stamps at liquor and Dollar General type stores.
A short term fix until you were able to provide for yourself again.
DeleteAs was welfare when it was called relief.