What: US discounters are heavily investing in their stores to make them more competitive in inflation times.

Why it is important: There is a US middle-income customers flight to these stores, which at some stage might also impact US department stores.

Dollar stores like Dollar General and Dollar Tree are remodelling their stores to cater to middle-income consumers as inflation drives demand for low-priced groceries.

Both chains are investing in freezers and coolers for groceries, with Dollar General expanding its food offering to more than 8,000 stores. Although dollar stores primarily cater to lower-income customers, middle-income consumers increasingly contribute to their grocery sales growth.

The remodelling and expansion efforts come as other retailers cut costs and close outlets, with UBS predicting that 50,000 US stores may close by 2027.

US dollar stores adapt to inflation