Dollar General is largest “dollar” retailer in the U.S. with over 16,000 stores across the U.S. Though the name would suggest otherwise, Dollar General sells merchandise up to $10 in price in categories such as consumables, household products, apparel and seasonal non-consumable items. Value is important for Dollar General’s customers and to meet customer preferences, 75% of items offered in store are below $5 in price. Average basket sizes have historically been in the range of $10-$11 but has increased to $12 since Covid.
Thanks for the writeup! Two questions. 1) DG's flywheel effect that you mention seems to me like a process that a typical business does (increase share -> leverage economies of scale -> reinvest back into the business). Am I thinking about this the wrong way? 2) re: margin pressure from the product mix, do you have an idea of what the margin would look like without owning distribution? I imagine over time the margins of a DG store will begin to more similar to a WMT super-centre
Thanks for the writeup! Two questions. 1) DG's flywheel effect that you mention seems to me like a process that a typical business does (increase share -> leverage economies of scale -> reinvest back into the business). Am I thinking about this the wrong way? 2) re: margin pressure from the product mix, do you have an idea of what the margin would look like without owning distribution? I imagine over time the margins of a DG store will begin to more similar to a WMT super-centre