(Reuters) - Dollar General posted a smaller-than-expected drop in quarterly sales on Thursday, as more shoppers turned to its stores for cheaper groceries and household essentials.
Discount store operators are seeing more cost-conscious customers browsing through the aisles of their outlets for affordable alternatives and value deals as higher food prices, borrowing costs as well as rising credit card debt squeeze household budgets.
Dollar General has also been taking measures to keep prices low on its everyday staples, while offering discounts and promotions as it tries to clear excess stock.
The company's total merchandise inventories in the third quarter declined 1.8% year-on-year.
The discount retailer's same-store sales fell 1.3% for the third quarter, compared with analysts' average estimate of a 2.08% drop, according to LSEG data.
Shares of the Goodlettsville, Tennessee-based company, down 45% so far this year, were up marginally in premarket trading.
The company reaffirmed its full-year sales and profit forecasts.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)