Tell Tale Signs of a Falling Economy

When the Economy Gets Shaky, Budget Brands Boom

In uncertain economic times, you’d expect luxury brands to falter and budget-friendly names to quietly thrive. But what we’re seeing now is something more dramatic: a realignment of consumer behavior. Consumer behavior has a tell-tail sign that is creating ripple effects across retail and real estate.

Take Dollar General, for example. The budget retailer just reported better-than-expected Q1 earnings and even raised its full-year outlook. Why? Economic turbulence is driving higher-income shoppers through its doors. Individuals who once wouldn’t blink at paying full price are now hunting for deals on seasonal home goods and decor, often boasting, “Would you believe it’s from the dollar store?”

Shifting Habits, Bigger Impacts

Dollar General saw a 5% jump in sales last quarter, rising from $9.9 billion to $10.44 billion. While foot traffic dipped slightly, the average transaction size rose by 2.7%. That’s a strong signal that even amid inflation, shoppers are buying smarter—not necessarily less.

Other retailers riding this wave include:

1. Costco, with a 7.9% sales boost last quarter

2. Sam’s Club, which logged a 6.7% jump, with its CEO saying, “In tough times, we do even better.”

3. Campbell’s, seeing broth sales surge 15% as families opt to cook at home instead of dine out

What Does This Mean for Real Estate?

As retail trends shift, real estate investors should pay close attention. Here’s why:

1. Consumer belt-tightening fuels demand for affordable housing
   When economic uncertainty drives upper-middle-income families toward discount retailers, it’s a cue that demand for entry-level homes and rental properties may rise. Investors positioned in this market segment may see stronger occupancy and more resilient returns.

2. Neighborhood retail anchors are evolving
   A Dollar General or discount grocer that once seemed like a second-tier tenant may now signal stability and foot traffic—even in affluent areas. Mixed-use developments and strip centers with these anchors are increasingly attractive.

3. Lifestyle downsizing can lead to real estate repositioning
   Just as homeowners are rethinking spending at the store, many are also rethinking space and location. Investors might see opportunities in downsizing trends, multigenerational housing, or affordable secondary markets.

A Word of Caution

While Dollar General’s numbers are strong, about 60% of its core customer base earns less than $30,000 per year. If tariffs increase and economic strain deepens, even discount retailers could feel the pinch. The same applies to real estate: markets serving lower-income tenants must be managed with extra care, ensuring affordability and value stay front and center.

Bottom Line:
In every economic cycle, there are winners and losers. Right now, budget-conscious brands are having a moment. If you're an investor, buyer, or seller, it's time to look beyond the headlines and understand the deeper behavioral shifts. Because just like that dollar-store wreath... real value can come from unexpected places.