If The Dollar Store Is Tanking, What Does That Mean For The Rest Of Us?

What you think of the economy in general really depends on what news outlet you listen to. One side is telling us that we’re making progress and the economy is turning around, while the other side vehemently argues that this is simply not the case and that the economy is actually getting worse.

They each have a set of “facts and data” that they like to bring out to help make their point. Looking at each piece of evidence on its own you might be swayed to buy into whichever argument is being presented.

But here is one piece of evidence that just came out that makes it difficult to believe that the economy as a whole is improving.

Family Dollar, the discount retailer that sells just about everything from baby food to groceries to glassware for just $1, announced that its earnings were significantly less than expected.

Family Dollar Stores Inc posted a lower-than-expected quarterly profit on Thursday sending its shares tumbling 13 percent as its push to sell more everyday items including soft drinks and cigarettes attracted more customers but hurt profitability.

The company also lowered its forecast for the year and said December sales, which came in after the quarter ended, were hurt as shoppers cut back on discretionary spending…

The results, including December same-store sales, also spotlight the impact of price competition from Dollar General and Wal-Mart Stores Inc and pressure on the lower-income consumers that may get worse given payroll tax increases this year, Boss said in a note to clients.

Read more on foxbusiness.com

When people are cutting back their spending at even the deep discount retailers like Wal-Mart and Family Dollar, you have to assume that the economy is not doing as well as one side is arguing.

Further, these discount retailers are also projecting that their earnings and sales will continue to decrease throughout the year.

For my money, I’d bet that the people who make a living selling goods at discount prices would be the best indicator as to the overall state of the economy. And while it is true there are pockets of opportunity for some, most people are choosing to be very conservative in their spending and choosing to hold on to their cash as they prepare for the future.

This is also a perfect time to get your personal financial house in order, taking care to conserve what you do have and improve your credit and situation in order to ride out the next storm and be ready and able to be one of the prepared to take advantage of the opportunities that will arise in times like these.

What’s your take on where the economy is headed right now. Do you think that when the dollar store’s are having a difficult time, it signals that we should be conservative with our credit and finances going forward? Leave your comment below.

Image By: Bart Everson

About Anthony Candella

Anthony is the founder and Directing Attorney of YourCreditAttorney.com and has been helping consumers just like you understand and improve your credit and financial situation since 2003.