Customer Growth and Pricing Power Analysis: Q3 2025 Earnings Insights for BJ’s, Dollar General, Ross, and Dollar Tree

Executive Summary

Across BJ’s, Dollar General, Ross, and Dollar Tree, customer demand is solid to strong with a clear tilt toward value and convenience, and most are demonstrating at least modest pricing power. The most attractive customer dynamics sit with ROST and DG (strong traffic and comps with margin/price leverage), with BJ and DLTR also growing but facing more visible execution and mix trade‑offs. The main pressure points are: (1) low-income consumer strain and SNAP/timing issues, and (2) margin drag from investments in store labor, remodels, and re‑stickering.

Overall, the portfolio is positioned to benefit from value‑seeking behavior and trading down, with ROST and DG best placed to outperform, and BJ and DLTR more balanced between upside and execution risk.

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Portfolio-level Customer Themes

1. Demand & Traffic

• Broad-based demand strength, particularly in:

  • Value apparel/off-price: ROST with +7% comps and +10% sales.
  • Rural discount: DG with +2.5% same-store sales, traffic-driven.
  • Membership warehouse: BJ with +1.8% merchandise comps and 5.5% two-year stack.
  • Dollar store: DLTR with +4.2% comps (ticket-driven, slight traffic decline).

• Traffic & cohort behavior

  • Traffic growth:
    • BJ: 15 consecutive quarters of traffic growth.
    • DG: Comp gains driven by traffic, not basket.
    • ROST: Strong broad-based traffic; no trade-down spike but value focus is resonating.
  • Traffic softness / recovery:
    • DLTR: Slightly negative traffic; mix of higher ticket and multi-price items, with disruption from re-stickering.

Conclusion: On customer demand, ROST and DG are the strongest, BJ is solid, DLTR is improving but has more moving pieces.

2. Pricing Power & Discounting Behavior

Across the portfolio, pricing actions are being absorbed without major customer attrition, indicating reasonable pricing power in value segments:

• BJ

  • Maintains gross margin rate flat YoY (ex-gas) even while investing in “member value”.
  • Own-brand (Wellesley Farms) positioned ~30% below national brands, indicating value-led pricing rather than margin expansion via price increases.
  • Tariff reductions are expected to pass through to consumers, reinforcing value rather than margin take.

• DG

  • Gross margin up 107 bps to 29.9%, driven by higher inventory markups and lower shrink, not by heavy discounting.
  • Management explicitly states no need to increase promotional intensity to sustain 2–3% comp growth.
  • Strategy to maintain a 3–4 percentage point retail price gap, suggesting continued disciplined pricing power versus competitors.

• ROST

  • Successfully implemented modest pricing increases with no material loss in units per transaction or traffic.
  • Tariffs reduced Q3 EPS by $0.05, but were mitigated via opportunistic buys and tight assortments.
  • Merchandise margin levered despite tariff headwind, signaling good merchandising-led pricing power.

• DLTR

  • Multi-price strategy substantially increases price points (e.g., multi-price Halloween items 3.5x profit vs fixed $1.25).
  • EPS up 12% YoY with gross margin +40 bps despite higher SG&A, showing pricing power via mix and higher price points.
  • Some customer friction evident in slightly negative traffic, but loyalty remains strong and higher ticket compensates.

Conclusion: ROST and DG exhibit the cleanest pricing leverage (higher margins without visible volume damage). DLTR has the highest nominal pricing power (multi-price) but must manage traffic risk. BJ uses pricing more to reinforce loyalty than to expand margins.

3. Customer Retention, Loyalty & Mix

While none of the companies report classic SaaS-style NRR, we can infer:

• BJ

  • Membership fee income +~10% YoY to $120.3M, driven by strong acquisition and retention and fee increases.
  • 12 consecutive quarters of market share gains and 15 quarters of traffic growth.
  • Performance in new clubs: memberships 25% ahead of plan, indicating healthy early-cohort retention and demand.
  • Explicit focus on membership quality and mix improvement across demographics.

  → BJ shows very strong customer retention and loyalty, with pricing (fee increases) absorbed.

• DG

  • Higher-income customers contributing disproportionately to new customer growth.
  • Strategy focused on retaining new customers and maintaining relative price gaps.
  • Digital delivery shows >70% incremental sales and strong loyalty, with larger baskets.

  → DG is both deepening relationships with existing customers and successfully attracting higher-income cohorts, signaling positive mix and likely improved lifetime value.

• ROST

  • No specific loyalty program yet, but:
    • Broad-based strength across demographics and geographies.
    • No evidence of trade-down spikes; core customers remain engaged.
    • Increased average store inventory and packaway indicate confidence in demand.

  → ROST’s retention is implicitly strong, with steady EPS and double-digit sales growth and no signs of customer fatigue.

• DLTR

  • Attracting over 3 million new households, predominantly higher-income.
  • Value proposition resonating across all income segments, with strong loyalty among core customers despite price repositioning.
  • Traffic slightly negative, largely attributed to internal re-stickering disruption, not waning appeal.

  → DLTR has strong net new customer acquisition but is in transition on how that translates into sustained traffic.

Conclusion: Retention and customer economics are strongest at BJ and DG (explicit membership/traffic metrics) and solid but less quantified at ROST. DLTR has the most dynamic mix (new higher-income customers, multi-price) but near-term noise in traffic.

4. Sales Cycle / Purchase Behavior Shifts

In retail, this translates to trip frequency, basket size, and category mix:

• BJ

  • Digital is ~17% of sales and growing 30% YoY; features like BOPIC, same-day delivery, and Express Pay shorten purchase friction and likely increase trip frequency.
  • Macro environment and SNAP timing have caused brief behavior disruptions, especially among low-income cohorts, but overall purchasing behavior has been stable across income cohorts.
  • General merchandise has strong seasonality (Q4/Q1); company is proactively tightening general merchandise inventory in Q4 to control markdown risk—this may modestly cap impulse/promo-driven basket but protect margins.

• DG

  • Same-store sales +2.5% with traffic up and flat basket size: customers buying fewer items but at higher prices, consistent with constrained budgets but pricing power.
  • Digital delivery (via DoorDash/Uber Eats) shows >70% incremental sales and larger baskets, indicating a high-conversion incremental channel.
  • SKU rationalization (2,500+ SKUs removed) without hurting top line suggests simplified shopping and faster conversion.

• ROST

  • Strong back-to-school performance followed by steady trends through the quarter.
  • Home category turned positive and poised for holiday gifting, potentially driving higher Q4 trip frequency.
  • Inventory build ahead of holidays indicates expectation of sustained strong demand and impulse-driven buying.

• DLTR

  • Comps +4.2% driven by ticket, with slightly negative traffic.
  • Internal operational disruptions (re-stickering) have temporarily affected trips, but Halloween performance and Q4 guidance imply reacceleration.
  • Multi-price assortment increases ticket per visit and category breadth, shifting baskets toward fewer units but higher value.

Conclusion: Customer buying behavior is most stable at ROST and DG. BJ is stable with some SNAP/macro noise. DLTR is in a temporary transition with improving ticket offsetting temporarily softer traffic.

5. Product Traction & New Offering Adoption

Across the portfolio, new initiatives (digital, AI, multi-price, branded assortments) are seeing clear signs of traction:

BJ

• Digital & AI
  • Digital sales +30% YoY, 17% of total sales, +61% on two-year stack.
  • Successful adoption of BOPIC, same-day delivery, Express Pay.
  • Beta launch of AI shopping assistant and personalized lists; robotics-enabled “digital twin” stores and Tally robot improving inventory and merchandising.
• Own brand / Fresh
  • Expansion of own brand (Wellesley Farms) and Fresh 2.0 beyond produce to meat, seafood, and bakery; early results positive.
  • Gas business: +2% comp gallons, outperforming industry declines, indicating traction in fuel value proposition.

→ BJ’s product and channel innovations show strong early adoption and support membership growth and basket expansion.

Dollar General (DG)

• Store formats & remodels
  • Project Elevate and Project Renovate remodels: 3% and 6% comp lifts respectively.
  • 196 new stores, mainly rural, using larger 8,500 sq ft format.
• Digital & Media
  • Digital delivery via DoorDash/Uber Eats across 17,000+ stores each, with high incremental sales and larger baskets.
  • Media network with double-digit growth, becoming a new revenue driver and route for vendor partnerships.
• Non-consumables
  • Non-consumable categories (seasonal, home) posted positive comp growth, aided by brand partnerships and layout.

→ DG is getting meaningful traction from remodels, digital delivery, and non-consumable revitalization.

Ross Stores (ROST)

• Branded strategy
  • “Good, better, best” branded assortments firmly embedded; driving comps above chain average, especially in ladies’.
  • Home category returned to positive growth; strong positioning for gift season.
• Store & experience upgrades
  • Self-checkout in 80 stores, reducing shrink and gaining customer adoption.
  • Store refresh program halfway done; strong customer feedback.
• Digital engagement
  • Improved performance from Meta/TikTok campaigns; early signs of better customer acquisition and engagement.

→ ROST’s branded strategy and store refreshes are clearly resonating, translating to 7% comps and 10% total sales growth.

Dollar Tree (DLTR)

• Multi-price assortment (core strategic shift)
  • Multi-price represented ~25% of Halloween sales and margin in 2025 vs 10% in 2022.
  • Multi-price Halloween items yielded 3.5x more profit and ~25% higher margin dollars despite 10% fewer units.
  • Management calls multi-price the most important strategic shift in company history.
• Category traction
  • Discretionary categories (party, home decor) showed acceleration; consumables solid.
  • Record Halloween sales > $200M.
• Operational upgrades
  • Shelf productivity/inventory optimization (though with a short-term $56M write-off).
  • Training and store standards initiatives (Race to Gold).
  • Technology upgrades to improve merchandising & replenishment.

→ DLTR’s multi-price and seasonal initiatives have strong product traction and margin benefits, despite some temporary operational noise.

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Company-by-Company Customer Dynamics and Outlook

BJ’s Wholesale Club (BJ)

Demand & Growth:

• Net sales +4.8% YoY to $5.2B.
• Merchandise comps +1.8% YoY, +5.5% two-year stack.
• Membership fee income +~10% YoY; 12 quarters of market share gains, 15 quarters of traffic growth.
• New clubs performing strongly (memberships 25% ahead of plan).

Pricing Power & Value:

• Merchandise gross margin rate flat YoY despite deliberate value investments.
• Own-brand positioned at ~30% discount to national brands.

Customer Trends:

• Stable purchasing behavior across income cohorts; some short-term disturbance from SNAP timing and government issues but recovering.
• Continued growth in digital (17% of sales) supports convenience and likely frequency.

Product Traction:

• Fresh 2.0, digital tools, AI/robotics (Tally, digital twins) all gaining traction.
• Gas outperformance (+2% comp gallons) suggests loyalty spillover.

Outlook vs Peers:

• Stable to moderately positive customer momentum, underpinned by membership strength and digital growth.
• Compared to DG/ROST, BJ is somewhat more exposed to low-income macro pressure and requires ongoing investment in value and experience.
• Likely to modestly outperform broader retail due to warehouse model, but less clean margin leverage than DG and ROST.

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Dollar General (DG)

Demand & Growth:

• Net sales +4.6% to $10.6B.
• Same-store sales +2.5%, traffic-driven; basket size flat.
• Operational progress and margin expansion ahead of plan.

Pricing & Margin:

• Gross margin +107 bps to 29.9%, led by:
  • Higher inventory markups.
  • Lower shrink (90 bps benefit).
• Management confident in sustaining 2–3% comps without ramping promotions.

Customer Trends:

• Low- to middle-income customers are cautious but traffic is strong.
• Higher-income segment contributing disproportionately to new customer growth.
• Digital delivery shows >70% incremental sales, bigger baskets, and high loyalty.

Product & Format Traction:

• Remodel programs (Project Elevate/Renovate) delivering 3–6% comp lifts.
• Non-consumables positive, leveraging Pop Shelf learnings.
• Media network delivering double-digit growth, enhancing vendor/customer engagement.

Outlook vs Peers:

• Among value retailers, DG currently has one of the strongest customer and margin trajectories.
• Real estate expansion (575 new stores in 2025; 450 in 2026) plus robust remodel ROI supports multi-year customer growth.
• Likely to outperform within this portfolio on both customer growth and profitability.

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Ross Stores (ROST)

Demand & Growth:

• Q3 sales +10% to $5.6B.
• Comparable store sales +7%.
• Strong back-to-school and sustained demand across categories and geographies.

Pricing & Margin:

• EPS up to $1.58 from $1.48.
• Operating margin 11.6%, down 35 bps mainly due to tariffs and distribution costs.
• Able to take modest price increases with no notable traffic or unit loss.

Customer Trends:

• No evident trade-down spike; growth is broad-based, suggesting strong core customer health.
• Home and ladies’ segments particularly strong, underpinned by branded strategy.
• High inventory levels ahead of holiday reflects confidence in ongoing demand.

Product Traction:

• Branded “good/better/best” assortments driving above-chain comps, especially in ladies.
• Store refresh program and self-checkout adoption improving customer experience and shrink.
• Marketing refresh targeting younger consumers is showing early engagement improvements without higher spend.

Outlook vs Peers:

• ROST presents the cleanest demand story: high comps, strong brand perception, limited macro excuses.
• With continued store expansion and operational leverage over new DC capacity, ROST is positioned to outperform on customer growth.
• Tariff headwinds are receding into Q4 and 2026, further improving the setup.

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Dollar Tree (DLTR)

Demand & Growth:

• Q3 net sales +9.4% to $4.7B.
• Comparable sales +4.2%, driven by ticket, with slightly negative traffic.
• Halloween sales > $200M, a record; seasonal a major driver.

Pricing & Margin:

• Adjusted EPS +12% YoY.
• Gross margin +40 bps to 35.8%; SG&A up 160 bps due to wages, re-stickering, liability claims, and store investments.
• Multi-price items deliver substantially higher profit per unit and higher dollar margins despite lower units.

Customer Trends:

• Value and discovery resonate strongly; over 3M new households, mostly higher-income.
• Core low-income customers remain loyal; inflation managed via selective pricing and cost control.
• Traffic softness tied mainly to internal re-stickering disruption, expected to ease.

Product Traction:

• Multi-price now ~25% of Halloween sales vs 10% in 2022; margin impact clearly positive.
• Strong performance in party and home decor; consumables solid.
• Store standards, training, and technology upgrades improving execution, though shrink remains a concern.

Outlook vs Peers:

• DLTR has strong strategic tailwinds (multi-price, higher-income customer mix) but faces:
  • Near-term traffic and SG&A pressures.
  • Elevated shrink and restickering-related disruptions.
• With EPS and comp guidance raised, DLTR likely performs well on revenue and EPS, but customer health is more mixed than at DG/ROST (ticket up, traffic down).

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Cross-Company Comparison

Snapshot of Customer & Revenue Trends

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Key Takeaways & Investment Implications

1. Value-seeking behavior is a powerful tailwind. All four companies are benefitting from customers prioritizing value, convenience, and discovery:

   • DG and DLTR in rural and dollar formats,
   • BJ via membership value and own brands,
   • ROST via branded bargains and off-price inventory.

2. ROST and DG stand out as the clearest customer winners.

   • ROST: High comps, broad-based demand, and effective pricing with limited customer friction.
   • DG: Traffic-led comps, improving mix toward higher-income customers, and strong incrementality from digital delivery.

3. BJ’s customer franchise is robust but somewhat more defensive.

   • Strong membership metrics, digital adoption, and new club performance imply healthy underlying customer economics.
   • Macro pressures on discretionary and lower-income members may cap upside vs DG/ROST but also make BJ relatively resilient.

4. Dollar Tree has high strategic upside but elevated execution risk.

   • Multi-price and higher-income household acquisition are clearly working economically (higher ticket, margin).
   • Short-term traffic softness, SG&A deleverage, and shrink temper near-term customer health vs peers, though guidance implies continued progress.

5. Pricing power is intact across the portfolio.

   • All four have been able to raise prices or mix up (multi-price, branded, own-label) without major demand destruction.
   • DG and ROST are leveraging this most cleanly into margins; DLTR is trading near-term traffic for future LTV and margin; BJ is using price mostly to enhance perceived value and loyalty.

6. Product innovation and channel expansion are clear growth multipliers.

   • BJ: digital, AI, Fresh 2.0, robotics.
   • DG: remodels, non-consumable lift, digital delivery, media network.
   • ROST: branded strategy, store refreshes, self-checkout, targeted marketing.
   • DLTR: multi-price seasonal and everyday assortments, store/tech upgrades.

Overall, customer-related dynamics suggest:

• Highest conviction outperformers on customer strength: ROST and DG.
• Solid but more defensive/steady: BJ.
• Strategic upside with execution/traffic risk: DLTR.

For a portfolio tilted toward sustained customer growth and pricing power, DG and ROST should be primary overweight candidates, with BJ as a stable complementary holding and DLTR as a higher-risk, higher-reward exposure to structural pricing/mix improvement in the dollar channel.