The ongoing government shutdown is taking its toll on Americans at the margins, the chief executive of Family Dollar said this week.
“The threat of the shutdown, the uncertainty regarding some of the government assistance … the uncertainty around job growth are very real to our customer every day,” said Howard Levine, the CEO of the discount retail chain, in a Wednesday call with analysts and investors.
“Over half” of Family Dollar’s customers are on some sort of government assistance, Levine said in the call.
Levine also said that the company expects high unemployment levels, higher taxes and “continued uncertainty” in Washington to continue to clamp down on consumers’ income.
Family Dollar has been growing in recent years as more Americans struggle to afford basic necessities. The company, with its network of more than 7,000 stores, is one of three dollar store chains (along with Dollar General and Dollar Tree) aggressively expanding across the country. These stores thrive on low-income shoppers — but not no-income shoppers.
Levine is bracing for shutdown pain, he said, as he doesn’t expect his customers to recover any time soon. “We expect that many of the headwinds faced by our customers will persist,” he said. “We have repositioned the company for the tough sales environment.”
Low-income Americans have been caught up in Washington’s funding impasse. Several states have scaled back or halted the Special Supplemental Nutrition Program for Woman, Infants and Children, which aids 9 million moms and babies across the country. Some states shuttered Head Start programs, affecting more than 7,000 children, until philanthropists stepped in with funding to cover the rest of the month. Arizona halted welfare checks for 3,200 families, until Gov. Jan Brewer (R) reversed the decision on Monday.
Around 800,000 government employees have been furloughed during the shutdown, and that number doesn’t include private-sector employees affected by the congressional standoff. While some workers have been called back — including most of the nearly 400,000 Pentagon workers — there’s still no guarantee of back pay for some employees.
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