Stifel Introduces 'LaBarometer,' A Monthly Metric Tracking Low-Income Consumers

Taylor LaBarr of Stifel introduced on Monday a new tracking metric called “LaBarometer” that attempts to quantity the “changing financial pressures on low-income consumers.”

The results from the monthly metric could provide investors with potential impacts on sales at Dollar General Corp. DG, Dollar Tree, Inc. DLTR, Big Lots, Inc. BIG and other retailers that sell specifically to low-income consumers.

LaBarr notes that his analyst team will use a “boots on the ground” approach and will visit stores throughout important selling days, including the first-of-the-month when SNAP/EBT payments recycle.

“We believe low-income household budgets are feeling notably healthier in October (pressure easing), driven by a combination of more hours worked and falling energy prices,” LaBarr wrote in a note on Monday.

In addition to the “LaBarometer,” LaBarr utilizes a “Macro Indicator of Dollar Store Sales,” or MIDSS, as a predictor of dollar-store comps. The analyst notes that the indicator rose to 3.3 percent in the third quarter, suggesting a “healthy topline” trend at dollar stores.

LaBarr expects Dollar General and Dollar Tree comps to outperform Family Dollar in the third quarter.