Dollar General Corporation
Consumer Staples · Consumer Staples Merchandise Retail
Structural: largest US small-box discount chain by door count (~20k stores), with a moat built on real-estate density in towns of <20k people where Walmart and club channels are uneconomic. Consumables-heavy mix (~80%) makes DG a defensive low-end-consumer proxy - basket size small, trip frequency high, snap and tax-refund seasonality material.
pOpshelf and DG Fresh self-distribution are the two internal growth/margin levers; new-store productivity has compressed as the network matured.
low-income consumer stickiness (DG’s core demo is increasingly trade-down from $WMT and $KR as SNAP rolls off); rural footprint is genuinely hard to replicate; self-distribution + private label lifts gross margin; pOpshelf is a credible second banner; capital-light remodels (DGTP, DGX) re-rate older boxes; buyback optionality once leverage normalizes.
shrink running well above pre-COVID baseline and structurally elevated; wage and labor-availability pressure in thin rural markets; $DLTR / $FIVE compete for the same trade-down trip; mix shift to consumables compresses gross margin even as it lifts traffic; new-store productivity declining as TAM saturates; SNAP and tax-refund timing create lumpy quarters that mask underlying trend.
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