Financial Recovery Likely to Take Time at Dollar General Amid Soft Demand From Low-Income Shoppers

Dollar General’s over 20,000 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.