Even bargain chains see spending pullback as higher prices squeeze more Americans

Dollar Tree is slashing its full-year earnings and sales forecasts as its customers continue to struggle with higher prices and spend less.

Shares tumbled more than 20% Wednesday after hitting a 52-week low on the prior day. The biggest one-day sell-off for Dollar Tree shares in more than 20 years arrived less than a week rival bargain chain Dollar General reported a dismal quarter and suffered its largest single-day slump ever.

Dollar Tree has been trying to lure customers from other retailers using its rock-bottom prices, but juggernauts like Walmart and Target have also said their customers are under pressure and they’re cutting prices, too.

That has left little leeway for bargain stores because huge chains like Target are cutting prices on groceries, a huge draw for customers who are likely to shop for other items at Target and skip an additional trip to a dollar store.