Subject: Re: A far better DG analysis
I've read various analyses of DG arguing that it's a 'buy', and have bought DG stock based on those analyses. I've also visited DG stores in a few rural areas (OK, 'a few' is not a lot of data) and have seen the issues noted by others including stock carts that block the aisles, piled up inventory in back corners, poorly labeled aisles, etc. My reaction was "I wouldn't want to shop there". But I'm not poor so I don't have to (also worth mentioning is that these are fixable issues).

A question that arises is: what do their customers do during hard economic times and how does this change profitability of Dollar General? If DG is the only game in town then doesn't their business stay the same, or even improve during downturns?

I don't know, but I'd guess that a certain fraction of their customers wouldn't suddenly start driving an hour to stock up at the nearest Walmart, or pay to order stuff from Amazon. My guess is that, if necessary, you'd dilute laundry detergent with water, you'd gravitate towards even lower priced brands, you'd buy lots of Hamburger Helper, i.e. do things to reduce your cash outflow. The effect would be to reduce DG's revenue.

There's only so much juice that can be squeezed from a lemon. I'm long DG, but view it as a gamble.