What Victoria's Secret and Dollar General have in common
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Illustration: Annelise Capossela/Axios
Victoria's Secret and Dollar General are two very different retailers, but they have one intriguing trend in common: they're finding growth at both ends of the income spectrum.
Why it matters: The retailers' latest results suggest both affluent shoppers and budget-conscious consumers are helping fuel sales, even as many Americans feel financial pressure.
The big picture: Victoria's Secret said its strongest customer growth came from households earning less than $50,000 and more than $200,000 annually, even while it reduces promotions, raising average selling prices.
- Dollar General, which traditionally caters to budget-conscious consumers, saw its biggest increase in customer count from households making more than $100,000 a year.
Between the lines: The retailers are winning those shoppers in different ways.
- Victoria's Secret is growing while leaning into a sexier, more aspirational brand identity.
- The lingerie retailer reported 13% comparable sales growth while continuing a "promo detox" strategy that relies less on discounting and more on product, marketing and brand storytelling.
- It attributed the gains it saw in the lower-income cohort to market share wins, with CEO Hillary Super saying those customers are "likely choosing not to spend in other places in order to spend with us."
Dollar General, meanwhile, is attracting customers with a combination of low prices, convenience and a growing assortment of $1-priced merchandise as elevated gas prices pressure household budgets.
- The discount retailer reported a 2% increase in comparable sales and a fourth consecutive quarter of customer traffic growth, helped by gains from both new and existing customers.
What they're saying: "In a world full of choices, she's choosing us," Super said.
- Dollar General CEO Todd Vasos said the company is seeing an "accelerated rate of trade-in" from shoppers earning more than $100,000 annually.
- Neil Saunders, managing director of GlobalData, said both retailers are benefiting from stronger execution, from Victoria's Secret's clearer brand positioning and product innovation to Dollar General's operational improvements and store execution.
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