The decline in people on food stamps is affecting profits at dollar stores, according to earnings reports from Dollar General.
Sales at Dollar General and Dollar Tree grew this year, but not as much as expected, due to warm temperatures, competition and drop in the number of people on food stamps, CEO Todd Vasos said in the company’s earnings report.
“Retail food deflation and a reduction in both [Supplemental Nutrition Assistance Program] participation rates and benefit levels, coupled with unseasonably mild spring weather, proved to be stronger than expected headwinds to our business,” Vasos said in a statement.
“The competitive environment also intensified in select regions of the country. Importantly, even amidst a challenging sales environment, we effectively managed our gross profit margin and leveraged our selling, general and administrative expense as a percent of sales,” Vasos said.
Dollar General expected to make $5.5 billion in sales in the second quarter, but instead made $5.39 billion.
More than 43 million Americans currently receive Supplemental Nutrition Assistance Program (SNAP) benefits, or food stamps, and the government will pay about $45 billion in benefits this year, according to U.S. Department of Agriculture data.
Food stamps enrollment spiked in 2012 with nearly 48 million people enrolled in the program, but enrollment has slowly declined since. After the 2008 recession, President Barack Obama issued waivers to the work requirement, which allowed able-bodied adults without children to receive benefits without proving they were looking for a job.
Many states are dropping the waivers as the economy improves. (RELATED: 7 States Are Ready To Cut Special Post-Recession Food Stamp Program)
Dollar General Corp. did not immediately return The Daily Caller News Foundation’s request for comment.
Follow Thomas Phippen on Twitter
Send tips to thomas@dailycallernewsfoundation.org.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.