“To offset margin pressure from rising product and freight costs, as well as sales being weighted toward lower-margin consumables, dollar stores are selectively raising prices, expanding private label offerings, and increasing direct sourcing,” S&P said. “On the whole, we think discounters are also doing a good job of managing inventory levels of more discretionary purchase categories, which is limiting their markdown risk.”
SPDR Consumer Discretionary Select Sector Fund (NYSEArca: XLY) was flat in morning trade Wednesday.
Tisha Guerrero contributed to this article.