Look at what's happening between Dollar General and Dollar Tree if you want proof. The reason for Dollar Tree's weaker outlook is price cuts it's taking at Family Dollar stores that will eat into margins. Dollar General said it's seeing plenty of customers visiting its stores to buy food and groceries. But the problem for Dollar Tree is that it has less exposure to the grocery business than Dollar General. Family Dollar's customers tend to have lower incomes than both Dollar Tree and Dollar General, and clearly these shoppers are feeling the strain of months of higher prices.

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