Dollar General Corp
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$187.00 | Bfkvw | Tdrrlqj |
Rural Positioning and Dense Store Network Result in Solid Competitive Edge for Dollar General
Business Strategy and Outlook
Dollar General’s 19,000-plus small-box locations make the retailer an omnipresent force in rural communities that lack national retail chains. The firm provides low-income households (a typical Dollar General customer earns around $40,000 per year) with a convenient fill-in shopping destination and reasonable price points on merchandise, which we view as the crux of its value proposition. Since thinly populated and less affluent towns cannot economically support an abundance of retailers, Dollar General thrives by leaning into areas with minimal competition. Furthermore, its impressive scale and proximity to consumers, product mix that is 80% consumables, and small basket size (usually around $15) help insulate the retailer from e-commerce competition.