In a significant blow to Dollar General, the budget-friendly retailer announced a downward revision of its sales and profit forecast for the year. The news sent shockwaves through the market, causing the company's shares to plummet by nearly 30% during afternoon trading on Thursday.

Dollar General now expects its same-store sales to grow between 1% and 1.6%, a sharp reduction from its previous projection of 2% to 2.7% for the year. CEO Todd Vasos attributed the softer sales trends to financially constrained low-income customers, highlighting the pressures faced by this core demographic.

Vasos emphasized that the company remains committed to its turnaround plan, which he initiated about a year ago upon rejoining the company. However, the 85-year-old retailer, with its target market of lower-income consumers, has been hit hard by the effects of inflation and other economic challenges that disproportionately affect these customers.

In addition to the revised sales outlook, Dollar General reported lower-than-expected adjusted earnings and same-store sales, further dampening investor confidence and contributing to the stock's decline. As a result, Dollar General shares are down approximately 30% for the year.

This recent setback is not the first for Dollar General in the past year. The company has been grappling with weaker consumer spending and facing backlash due to federal safety violations and violent incidents at its stores. In a settlement with the Department of Labor last month, Dollar General agreed to pay $12 million in penalties for exposing low-wage employees to dangerous working conditions.

The challenges facing Dollar General extend beyond these internal issues, as the retail landscape becomes increasingly focused on low prices and value for money. Neil Saunders, a retail analyst and managing director at GlobalData, noted that as inflation eases, more retailers are slashing prices and enticing customers with competitive alternatives to Dollar General.

The road ahead remains uncertain for the dollar store chain as it navigates an economy strained by the financial challenges faced by low-income consumers. Dollar General must find ways to adapt and compete in an evolving retail landscape that prizes affordability and value, while also addressing the concerns surrounding employee safety and public perception.

These developments highlight the growing demands placed upon retailers, particularly those catering to lower-income consumers, who bear the brunt of economic hardships more acutely. As Dollar General faces these headwinds, its ability to rebound and regain investor trust will be closely watched by the market and industry experts alike.