ZACKS·2025-12-09 17:01Core Insights - The performance of Dollar Tree (DLTR) and Dollar General (DG) indicates a preference for value investments amidst economic pressures, with DLTR and DG shares rising approximately 57% and 64% year-to-date, respectively, surpassing AI leaders like NVIDIA [1][2] Economic Indicators - Dollar General reported a same-store sales increase of 2.5% in Q3, while Dollar Tree's same-store sales rose by 4.2%, contrasting with Target's 3.8% decline [3][4] - Dollar Tree added 3 million new shoppers, expanding its customer base to 100 million [4] Consumer Behavior - A significant shift in consumer behavior is noted, with 60% of new Dollar Tree shoppers earning over $100,000, indicating that higher-income shoppers are "trading down" to discount retailers [5][6] - Dollar General's CEO reported increased customer traffic but noted more restrained spending per trip, reflecting changing consumer spending habits [6] Investment Implications - The rise of discount retailers suggests that value-focused investments may perform well in the near term due to ongoing economic uncertainties, despite a seemingly strong economy driven by AI investments [7] - In a volatile market, dividend ETFs are highlighted as a potential safe haven for investors seeking stable income [8] Value Stocks Characteristics - Value stocks, typically trading at low valuations, are favored in uncertain economic conditions due to their stable demand and predictable earnings, making them attractive for investors prioritizing cash flow [9] ETFs to Consider - DLTR and DG stocks are included in ETFs such as Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS) and Invesco S&P 500 Pure Value ETF (RPV), which are recommended for investors [10]