Latest data shows modest uptick in the percent of Americans benefitting from food stamps (otherwise known as SNAP – Supplemental Nutritional Assistance Program) to about 15%. Don’t be fooled. The year/year growth rate is actually declining at an accelerated rate. At the current trajectory, it should go negative by October.
We think that growing SNAP participation has been a significant tailwind for dollar stores over the last 5-years. The absence of which we think is something that will temper their top-line growth rate on the margin. We remain bearish on FDO.