The CEOs of Ollie’s, Five Below and Dollar General all expressed similar sentiments to consumers on recent earnings calls. They echoed comments from leaders at Lowe’s and Home Depot.
It’s part of a troubling trend that suggests at least some U.S. consumers are still struggling financially. Recent surveys support their broad views, with several CEOs outright stating that consumers focus on “needs, not wants.”
“Consumers have not given up on holiday spending, they are becoming more intentional about where and how they spend,” he said. Kiara Barrett, Global Head of Thought Leadership, Circana. “Throughout 2026, we see shoppers shifting to a new definition of value that goes beyond price.”
This is consistent with the results of a study by EY Parthenon.
“About 72% of consumers said they still have room to scale back spending on dining, beauty and personal care, and clothing without a major impact on their daily lives, highlighting discretionary spending as a continuing pressure valve on household budgets,” the research firm said in its August consumer confidence report.
Ollie’s Bargain Outlet CEO thinks consumers are buying less
Ollie’s Bargain Outlet CEO Eric Van der Valk provided the latest example of consumer behavior dragging down sales. He addressed the issue during Ollie’s second-quarter earnings call in September.
“Low-income customers prioritize needs over wants, shop closer to need and, in many cases, delay discretionary purchases when possible, while higher-income customers continue to buy at low prices in search of value,” he said.
Driven by new store openings, the chain’s net sales rose 9.1%, while same-store sales fell 1.8% year over year, according to data released in the chain’s second-quarter earnings report.
Van der Valk shared more insights about his chain’s customers.
He added: “Consumers remain resilient, but they are increasingly picky in how they choose to spend their money.”
He noted that the chain is positioned so that there is value at both ends.
“Our product range covers the consumer goods our customers need and the discretionary items they want,” he said.
Five Below and Dollar General See Same Trend
“Our core customers, they clearly prioritize want over want,” Five Below CEO Joel Anderson said on the chain’s first-quarter 2025 earnings call.
Five Below’s total sales increased 11.8%, but comparable sales fell 2.3%, he said on the call.
“Consumers are becoming more picky about their money and increasingly buying on demand. We see this in the types of products they buy, with more items selected across our consumer packaged goods category versions such as confectionery, food and beverages, beauty and HBA,” he added.
Dollar General CEO Todd Vasos made similar comments during the company’s second-quarter earnings report in September.
“Obviously, starting in the second quarter, customers are nervous. We’re seeing that and customers are obviously feeling it every day. We’ve always said we reserve the right to go in and do what we think is necessary for our core consumers and any price reduction consumers that we see,” he said.
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Home Depot and Lowe’s are seeing similar trends
Executives at Home Depot and Lowe’s both commented on recent earnings calls about consumers delaying some projects.
“Larger discretionary items remain under pressure,” Billy Bastek, Home Depot’s executive vice president of merchandising, said on the chain’s second-quarter earnings call.
Lowe’s CEO Marvin Ellison blamed one incident for the layoffs during the company’s second-quarter earnings call.
“Rising fuel prices coupled with wider economic uncertainty are impacting household budgets. Customers continue to tell us they are cautious about spending and prioritizing when and where to invest in homes. As a result, discretionary DIY demand remains under pressure,” he said.
Natural gas prices remain high
“The national average price per gallon of regular gasoline fell 6 cents last week to $4.27,” AAA shared on Oct. 22.
However, high crude oil prices prevented a sharp decline in oil production.
“Currently, crude oil prices are close to $100 per barrel due to instability in the Strait of Hormuz. This month is expected to set the most expensive October natural gas price record ever, following similar records in August and September this year,” the agency said.
- National average on October 22: $4.27
- One week ago: $4.33
- One month ago: $4.47
- One year ago: $3.06
“The hit to real disposable income from higher gasoline prices tends to particularly affect spending on automobiles and discretionary goods and services,” Goldman Sachs economist Jessica Rindels wrote in an April report.
Shoppers become more careful
“Consumers haven’t stopped wanting things. They’ve just gotten better at talking themselves out of buying them,” RTM Nexus CEO Dominick Miserandino told the Wall Street Journal.
He believes consumers are showing restraint because they know they have bills to pay.
“People still want new TVs, better shoes, and weekend getaways, but unfortunately the power company and the grocery store take priority in their paychecks. When housing, insurance, and groceries take up more of the budget, everything else has to earn a spot in the shopping cart,” he added.
He noted that the situation has hit some retailers harder than others.
“Consumers are still shopping, but they are giving themselves fewer and fewer reasons to buy. It’s a tough environment for retailers that rely on impulse buying because consumers don’t necessarily lose their desire to spend. They just don’t have the space to indulge,” Miserandino shared.
Maurie Backman, a freelance retail and personal finance professional with more than 20 years of experience, believes it comes down to people not having enough cash to buy extra stuff.
“Given the high costs, consumers have to make tough choices. This may mean maxing out their budget on essentials and skipping the extras. It will be interesting to see how far consumers are willing to stretch themselves as the holidays approach. Some may cut back now to make room for additional spending in late November and December,” she told TheStreet.
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