Discount store Dollar General is billed as a haven from rising inflation. But a new lawsuit claims that it "routinely" overcharges customers.
Filed by the Federal Trade Commission and 20 states, from California to Connecticut, the suit contends that the company charges customers more at the cash register than what is displayed on store shelves, price tags, and ads. "This pattern of inaccurate pricing has persisted for years and affects millions of purchases across the country," the suit says.
The stock was trading down around 4% Friday at $127.94, and Dollar General didn't reply to Barron's request for comment on the suit.
This isn't the discounter's first rodeo over pricing lawsuits. It has settled similar charges in recent years for less than $2 million each, without admitting fault. In the most recent settlement with New York state, announced earlier this month, it agreed to donate $1.875 million to nonprofit organizations.
So chances are this new suit wasn't all that is weighing on Dollar General Monday. It is likely also getting hit by a rotation back into tech stocks following a selloff last week.
Both the Nasdaq and iShares Semiconductor ETF were rising again Monday. Investors had previously rotated out of tech stocks following a filing from Meta that raised concerns about tech spending. Excitement over Anthropic's upcoming public offering are likely fueling that rebound.
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