If you can’t afford the dollar store, where do you go?

Summary

Marketplace Morning Report: "If You Can’t Afford the Dollar Store, Where Do You Go?"
Release Date: March 14, 2025
Host: Sabri Ben

---

I. Economic Overview: Market Corrections and the Struggles of Low-Income Americans

Market Performance and Investor Sentiment

The episode opens with Sabri Ben addressing the recent downturn in the stock market. On March 14, 2025, the S&P 500 officially entered correction territory, marking a 10% decline from its previous high. Sabri emphasizes that while stock markets like the S&P 500 are indicators of investor confidence in publicly traded companies' future earnings, they do not directly mirror the state of the broader economy.

Dollar General as a Barometer for Low-Income Consumers

To gauge the economic well-being of low-income Americans, the discussion shifts to Dollar General, a retailer predominantly serving customers earning under $40,000 annually. According to Dollar General's CEO, Todd Vassos, the company's core customers are facing increasing financial hardships. In the latest earnings call, Vassos highlighted a decline in customer traffic, reflecting broader economic struggles among shoppers.

• Quote: Sabri Ben states, "If you can't afford the dollar store, where do you go?" (00:32)

Impact of Shrink on Retail Operations

Kailey Wells reports insights from retail analyst Matt Todd of S&P Global, noting that end-of-month store sales at Dollar General are slowing down as customers tighten their budgets. Additionally, the issue of inventory loss, or "shrink," has risen significantly due to third-party theft, further straining the retailer.

• Quote: Sabri Ben remarks, "Shrink, I think, is another sign of people struggling at the lower end of the income spectrum," complemented by Nick Palamini's observation, "people stealing things." (01:35, 01:42)

Changing Definitions of Necessities

The conversation delves into how consumers prioritize their spending based on income levels. Nick Palamini from the University of California, Santa Barbara, explains that higher-income households may continue purchasing items deemed as necessities, such as fabric softener, while lower-income consumers are forced to cut these out first.

• Quote: Nick Palamini notes, "Necessity, but someone who is lower income, they're going to cut out something like fabric softener more quickly than say they cut out laundry detergent." (02:12)

Tariffs and Consumer Prices

Kailey Wells adds that Dollar General is unlikely to absorb price increases stemming from tariffs, meaning that price-sensitive consumers may face higher costs during the summer months. This development could further exacerbate financial pressures on Dollar General’s clientele.

II. Safe Haven Investments: Gold and Treasury Yields

Rising Gold Prices

Sabri Ben highlights a significant milestone in the precious metals market: the price of gold has surpassed $3,000 per ounce for the first time ever. Gold has traditionally been seen as a safe haven for investors during times of economic uncertainty.

• Quote: Sabri Ben shares, "The price of gold is just north of $3,000 an ounce. That's the first time that's happened ever." (02:34)

Increased Investment in Treasury Bonds

In addition to gold, investors have been increasingly turning to ten-year treasury bonds as a secure investment option. The yield on these bonds has reached 4.31%, reflecting a growing preference for stable financial instruments amidst market volatility.

III. Odd Job Series: A Day in the Life of a Vintage Race Car Mechanic

Introducing Nick Palamini

Transitioning from economic analysis, Sabri Ben introduces the "Odd Job" series featuring Nick Palamini, a vintage race car mechanic at GMT Racing in Connecticut. Nick provides an in-depth look into his niche profession of preserving and restoring old race cars.

Preservation and Restoration Efforts

Nick explains that his work involves understanding each car's place in racing history and rebuilding it to meet modern reliability standards. This process requires sourcing parts globally, often manufacturing components in-house when necessary. Nick emphasizes the meticulous nature of the job, stating:

• Quote: "It's about understanding where it fit in racing history, what was this car's purpose, and then trying to rebuild it to embody that and make it reliable by today's standards." (04:18)

Challenges in the Industry

One of the significant challenges Nick faces is attracting younger generations to the field. The high costs associated with vintage car restoration act as a barrier to entry, making it difficult to sustain the industry’s passion and expertise.

• Quote: "A lot of that, I think personally, is down to cost. It's not a cheap hobby to get into, and that's, at the end of the day, that's what it is as a hobby." (06:00)

Sourcing and Manufacturing Parts

Nick shares insights into the logistical aspects of his work, including sourcing parts from around the world and fabricating components when necessary. His team maintains a fully equipped machine shop to produce custom parts, ensuring they can meet the unique demands of vintage race car restoration.

Community and Client Relationships

Maintaining strong relationships with clients is crucial for Nick. He describes how they support clients by housing their vintage cars, preparing them for races, and even assisting drivers during events to ensure a smooth and enjoyable racing experience.

IV. Closing Remarks

The episode concludes with Sabri Ben encouraging listeners to share their unique job experiences and briefly mentions other segments and upcoming content, maintaining the report's engaging and informative tone.

---

This episode of Marketplace Morning Report provides a comprehensive look into the economic challenges faced by low-income consumers through the lens of Dollar General's performance while also offering a captivating glimpse into the specialized world of vintage race car mechanics. By intertwining market analysis with personal stories, the report paints a vivid picture of current economic sentiments and the enduring passion that fuels niche professions.

Transcript

[MultiCare Representative]

Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn [e-mail].

[Sabri Ben]

If you can't afford the dollar store, where do you go? From Marketplace, I'm Sabri Ben, ashore in for David Brancaccio. The S&P 500 officially hit correction territory yesterday. That just means it's come down 10% from its last high. But markets, even the S&P 500, are not the economy. They are a sign of how investors feel about the future earnings of publicly traded companies. In general, investors if you want to know how the rest of America is feeling, and in particular how low income Americans are feeling, you could look to Dollar General. Its CEO Todd Vassos said in its earnings call this week that its core customers these are people who earn under $40,000 a year, are struggling Even more. Customer traffic fell last quarter. Marketplaces Kailey Wells has more Dollar General's.

[Kailey Wells]

Customers are struggling and end of month store sales are slowing, says retail analyst Matt Todd with S and P Global.

[Sabri Ben]

Lower income households who are their core customer are running short on cash.

[Kailey Wells]

Plus there's inventory loss. Something called shrink is high elevated.

[Sabri Ben]

Shrink, I think, is another another sign of people struggling at the lower end of the income spectrum. Third party theft is the largest component.

[Nick Palamini]

Of it, people stealing things.

[Kailey Wells]

Dollar General's CEO said customers have already cut out discretionary purchases. Now they're going without some basic necessities, too. Paul Partly by having a more strict definition of necessities, the more income you.

[Nick Palamini]

Have, the more we tend to consider things as necessities.

[Kailey Wells]

Nick Pretty is with the Laboratory for Aggregate Economics and Finance at UC Santa Barbara. He says take something like fabric softener. Higher income consumers might call that a.

[Nick Palamini]

Necessity, but someone who is lower income, they're going to cut out something like fabric softener more quickly than say they cut out laundry detergent.

[Kailey Wells]

Prentnar says Dollar General won't want to absorb price increases from tariffs, which means price sensitive consumers who shop there might bear a higher share of that burden this summer. I'm Kaylee Wells for Marketplace.

[Sabri Ben]

The price of gold is just north of $3,000 an ounce. That's the first time that's happened ever. Gold is where investors sometimes put their money when they are too worried to put it anywhere else. And you know what else is considered a safe place for money. Ten year treasury bonds. Investors have been piling into those over the past few months. The Yield on the 10 year treasury is now at 4.31%.

[Janelie Espinal]

Foreign.

[Sabri Ben]

If you want to be savvy about the economy, the Marketplace newsletter is just what you need. Every Friday you'll get explainers and analysis that makes sense of everything from the moving markets to grocery prices. No jargon, no hype, just smart takes delivered to your inbox. Sign up [e-mail] subscribe.

[MultiCare Representative]

For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn [e-mail].

[Sabri Ben]

Now we return to our Odd Job series. What's that like? In today's edition we will hear from a vintage race car mechanic, Nick Palamini. He works at GMT Racing in Connecticut where he preserves old race cars.

[Nick Palamini]

I actually had one guy that was in the aerospace industry and he's like, I've met fighter pilots and I think you have a cooler job. I'm like, I don't know if I necessarily agree with that, but thank you anyway. My name is Nick Palamini and I work on vintage race cars. Whatever car it is, it's about understanding where it fit in racing history, what was this car's purpose, and then trying to rebuild it to embody that and make it reliable by today's standards. A lot of these cars were meant to be used for a racing season. Today we have to make them last for year after year after year. It's interesting to see how the engineers thinking about how to go about certain things, has evolved over the years and having to remember that each of these vehicles, even though it looks archaic by today's standards, it was pushing the limit of what was possible in its day. We source parts from all over the world. Some of the ignition systems we use are manufactured in Australia. We have engine builders all over the country. We know where to get parts in England and other places in Europe. A lot of the things sometimes you just can't get at all. And we can make a lot of the parts. We have a whole rack of metal to various specs and then we just pull what we need, cut it to length, weld it up. We have a full machine shop that we can make pretty much whatever we need and whatever we can't make, we know who can. We have a whole host of clients that bring us their vintage race cars. We generally house them at our shop, and we have a huge storage building as well. So before each event, we load the cars in the trailers and we show up at the track. Sometimes some of the vehicles, it's difficult to belt yourself in. So we help the drivers get situated in the vehicle. Sometimes we'll communicate with them on the radio set, basically make sure that they have an enjoyable weekend at the race. When we ran races in Australia and New Zealand, we put everything into a shipping container and discovered that we were actually able to track the shipping container. The overseas stuff, we don't do that often, and the customers are generally fairly involved with making sure that that happens. We have a set fee for transporting, like in the country where it's, you know, X amount per mile, and then for each crew member, it's X amount per day. We have more work than we can do, really. So in that sense, there's more than enough customer interest in what we do. I mean, there's been doomsayers since the 70s and 80s. There are challenges in the industry going forward as far as getting newer people, younger people into it. A lot of that, I think personally, is down to cost. It's not a cheap hobby to get into, and that's, at the end of the day, that's what it is as a hobby. I think fascination with actual machines is not going to go away no matter how many screens are put in front of young people. There's enough variety out there, I think, of people's experiences. It's never going to be like it was in the heyday of, you know, 50s, 60s, even the 90s of car culture. I don't think, you know, it'll change and we just have to change with it.

[Sabri Ben]

I know some of you out there have some pretty wild jobs, so if you are in a unique line of work and want to share, please do send us an email. Morningreportketplace.org we would love to hear from you. Our executive producer is Kelly Silvera. Our digital producer is Dylan Mietanen. Our engineers are John Brewington and Becca Weineman. In New York, I'm Sabri Benishour with the Marketplace Morning Report from apm, American Public Media.

[Janelie Espinal]

Consumer confidence had its sharpest monthly decline since 2021, which means we're all in our feels about money. And while uncertainty is the only constant these days, it's also a great reason to get serious about understanding personal finance. I'm Janelie Espinal, host of Financially Inclined, a podcast from Marketplace that makes learning about money simple. Learn about practical skills like negotiating job offers, dealing with money and friendship and love, entrepreneurship and student loans. Get serious about your money and build a life you've always dreamed of. Listen to financially inclined wherever you get your podcasts.