Dollar General quietly opening full grocery stores
The discount chain is testing the concept, and is already beating big-name giants on price.
Discount retailer Dollar General (DG) has thrown its low-price hat into the grocery ring by challenging the supermarkets and big-box retailers in the produce business.
The Tennessee company opened its 11,000th store this past October. And, according to The Tampa Tribune, DG has quietly established about 100 grocery stores nationwide -- including 14 in the very competitive Florida market.
And the newspaper says Dollar General is giving some big-name grocery companies a run for their money when it comes to prices. The Tribune quotes data from the Kantar Retail market research showing DG beat out Wal-Mart (WMT), Famliy Dollar (FDO), Stop & Shop, Aldi and Target (TGT) in pure price data.
"The reputation of a dollar store comes with the territory, but we are actually not really a dollar store," company spokeswoman Crystal Ghassemi told the Tribune. "A lot of people are starting to realize that we carry a lot of the most-popular brands on the shelf."
Analyst and investor perception of Dollar General is also starting to evolve. Its share price has been on the upswing since its better-than-expected third quarter results, announced last week.
Goldman Sachs recently upgraded the company to a Conviction List "buy" from "neutral" -- noting DG's "myriad initiatives and ability to gain share as a leading low-cost operator should continue to power top- and bottom-line growth despite our cautious view across food retail."
FBR & Co. noted that, despite recent share price volatility, they believe Dollar General "is well positioned in the current consumer environment and that its strong business trends should continue. For FY14, we are modeling positive comps (driven by continued positive traffic trends and a tobacco benefit) but slightly shrinking operating margins."
And BMO Capital Markets rates Dollar General stock at "outperform." While observing that about one-third of the company's transactions involve cigarettes, those tobacco-only purchases are reportedly declining. "So DG is beginning to convert the cigarette customer into a shopper," it adds, "which bodes well for FY14."
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I like Dollar General. If they put their grocery store in my area I will go. Their stores have good brand named products and their store brand products are very good.
My wife is unable to pass a DG store without checking it out ! We have found
many good buys there.Some items are better than the chain stores.
FOR CONVENIENCE AND VALUE I USE OUR DOLLAR STORE WEEKLY. SAVES
GAS, MONEY AND TIME AND ON THE RARE TIMES YOU NEED TO EXCHANGE
MERCHANDISE THERE IS NO PROBLEM. HAVE ENOUGH EMPLOYEES TO HELP
THE CUSTOMERS CHEERFULLY . LIKE WAL MART USED TO BE WHEN SAM WALTON
WAS ALIVE. COMPETITIVE PRICING ON NAME BRANDS AND THEIR CLOTHES AND
TOYS ARE BETTER THAN WAL MART JUNK. I SAY THEY ARE NUMBER 1 IN MY BOOK.
Dollar General does have very good locations and the prices are fairly good on some items. They are able to keep their prices somewhat low because they pay their employees very little. They have no loyalty what-so-ever towards employees. I used to be a good customer, but with what I know about their practices, I will no longer patronize their stores.
good luck to them...
what helps the consumer is good competition. as long as they play by the rules and don't kill competition through bad trade practices, then I hope they make a go of it.
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