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Actionable news in AG: FIRST MAJESTIC SILVER CORP,

Low-income shoppers are in worse shape than you thought

It was finally starting to look like they'd caught a break.

Yet as the lowest-earning Americans feel the squeeze of rising health-care and housing costs, the lift from a stronger job market and low fuel prices hasn't been enough for them to feel relief. And for hundreds of thousands who are unemployed, a change in qualifications for Supplemental Nutrition Assistance Program benefits is making it even tougher to put food on the table.

During the second quarter, Dollar General said that combined with food deflation, these cutbacks dented its same-stores sales between 0.6 and 0.7 percent. Though a reduction in the number of people enrolled in food stamps did not play a material role in Dollar Tree's comparable sales slowdown, its target consumer "continues to be under a lot of pressure," CEO Bob Sasser said.

Yet the picture remains muddy. Like the dollar stores, Wal-Mart leans heavily on low-income shoppers to fuel its sales gains. But unlike its small-shop competitors, Wal-Mart U.S. recorded its biggest comparable sales gain in four years during the second quarter.

"Everybody's trying to figure this out," Joe Feldman, senior managing director at Telsey Advisory Group, told CNBC. "I do think that there's something broader than just simply saying Wal-Mart's taking share."

Indeed...


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