Dollar General Corp.
) recently unveiled its 11,000th outlet in Murfreesboro, TN. With
this store opening, Dollar General emerges as one of the
retailers operating maximum number of stores in the Unites
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Dollar General has opened 375 new outlets and remodeled or
relocated 377 stores during the first half of 2013.The company
plans to open about 650 new stores, up from 635 projected earlier
in fiscal 2013. Moreover, it hopes to remodel or relocate about
Since 2007, Dollar General has provided nearly 30,000 new jobs
and the company anticipates to create about 6000 new jobs in
Tennessee-based Dollar General -- which competes with
Ross Stores Inc.
Costco Wholesale Corp.
Dollar Tree, Inc.
) -- trades in low priced merchandise typically $10 or less in
four categories, namely Consumables, Seasonal, Home products and
We believe that the company's commitment toward better price
management, cost containment, private label offering, effective
inventory management, merchandise and operational initiatives
will likely drive sales and margin growth. Moreover, in order to
drive traffic, Dollar General is focusing on both consumables and
Further, Dollar General's history depicts impressive
comparable-store sales growth. The company's comparable-store
sales remained robust despite unfavorable macroeconomic
conditions mainly due to competitive pricing and attractive store
expansion strategies, including remodeling and relocations.
Notably, fiscal 2012 marked the company's 23rd consecutive year
of comparable-store sales growth.
However, increase in gross margin pressure due to rising sales of
low margin-carrying products, macroeconomic factors and
competitive pressure pose challenges to Dollar General's growth
in the near term.
Additionally, Dollar General could face market cannibalization if
it further expands in the geographies where it already exists.
Currently, Dollar General carries a Zacks Rank #2 (Buy).