The Biden-Harris administration’s economic policies are showing their true colors, and it’s not just American families feeling the strain—now, even discount giants like Dollar General are showing signs of distress. On Thursday, Dollar General took a significant hit, slashing its annual sales and profit forecast, a move that sent shockwaves through the market and left consumers and investors alike wondering what’s next.

This drastic step comes as inflation continues to squeeze American households, forcing shoppers to tighten their belts and focus solely on essentials. The result? Fewer purchases of the higher-margin items that typically help retailers like Dollar General maintain profitability. The fallout was immediate—Dollar General’s shares plummeted by more than 20%, a stark indicator of the challenges budget retailers are facing in today’s economy.

But Dollar General isn’t the only one feeling the pinch. Competitors like Dollar Tree are also grappling with weakened demand for non-essential items—home goods, electronics, toys, and apparel—items that once drove their growth. In the meantime, retail behemoths like Walmart and Target, along with Chinese e-commerce giant Temu, are muscling in on Dollar General’s territory by offering low-priced alternatives, further tightening the screws.

Dollar General’s CEO, Todd Vasos, was candid about the situation. “Despite advancing several of our operational goals and driving positive traffic growth, we are not satisfied with our financial results, including top-line results,” he said. The statement underscores the financial strain that Dollar General’s core customers—everyday Americans—are experiencing, thanks to inflation and the broader economic pressures exacerbated by current policies.

In response, Dollar General is promising “decisive action” to enhance customer value and improve the in-store experience. However, the numbers paint a sobering picture. The company has slashed its fiscal 2024 same-store sales growth forecast to a mere 1% to 1.6%, down from the previously optimistic 2% to 2.7%. Even more concerning is the forecast for annual earnings per share, now expected to fall between $5.50 and $6.20—a significant drop from the earlier projection of $6.80 to $7.55 per share.

This downturn stands in stark contrast to the fortunes of retail giants Walmart and Target, both of which have raised their full-year profit forecasts. Their strategic price cuts have successfully attracted price-sensitive consumers, leaving discount retailers like Dollar General scrambling to keep up.

Despite some easing in supply chain costs, Dollar General continues to face pressure on its margins. High labor costs, increased markdowns, inventory damages, and retail shrink—losses from theft or damage—are all taking their toll. The company’s quarterly gross margin has dipped to 30%, down from 31.1% just a year ago.

The numbers for the quarter ending August 2 tell the tale: Net sales reached $10.21 billion, falling short of analysts’ expectations of $10.37 billion. Profit per share came in at $1.70, missing the mark set by analysts at $1.79 per share. The market’s reaction was swift, with Dollar General’s shares dropping to $94.60 in premarket trading—their lowest since June 2018. The ripple effect hit the entire discount retail sector, with shares of rival Dollar Tree also falling by about 6%.

As inflation continues to erode purchasing power and economic policies fail to provide relief, the struggles of discount retailers like Dollar General serve as a warning sign for the broader economy. These companies, often seen as recession-resistant, are now showing signs of strain under the weight of the Biden administration’s economic agenda. For consumers and investors alike, the message is clear: The road ahead may be far bumpier than anticipated.