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Discount stores are raising prices at a faster rate than many other supermarkets amid inflation

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Sheri Thompson struggles to stretch her family’s $200 weekly food budget, with food prices rising 13.5% nationwide since August last year.

“My grandson, he comes in and says, ‘Nana, we should have lunch by now.’ And I said, ‘No. We actually skipped lunch. We’re having dinner,’ said Thompson.

She runs errands at Dollar General, where new data suggests total prices are up nearly 24%, according to Teller. At the nearby ALDI, prices have risen almost 17%.

Both discount stores are often used by families in low-income neighborhoods.

Leo Feler, chief economist at Numerator, which tracks hundreds of millions of store receipts, says food inflation disproportionately affects lower-income people because higher-income communities have more options.

“You can go from a Whole Foods to a Walmart, from a Walmart to a Dollar General,” Fler said. “Once you’re a low-income consumer, you’re already at the cheapest place to buy food. And that just means these stores have more pricing power.”

Discount stores increased prices for meat, poultry, fish, eggs and dairy products at a faster rate compared to many other grocers.

Milk prices at a single Dollar General store in Texas were up 20% more than a year ago.

“Like many other retailers, we are forced to pass on certain increases in product costs, although not of the magnitude suggested by Teller,” Dollar General said in a statement to CBS News.

ALDI did not respond to a request for comment.

Yet discounters are cheaper than most other supermarkets that can only drive prices so high.

“You can’t raise prices if people move away from you,” says Felér said. “Except at a Dollar General or ALDI, people don’t move. More people are still coming to these stores, despite the higher prices.”

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Researchers also found that when money for groceries runs out, cash-strapped consumers turn to less healthy options, such as dollar menus at fast-food restaurants.

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