No. of Recommendations: 4
I used to live in Tennessee and had offices throughout the southern US (five in
Alabama alone). I also used to bicycle through Tennessee, Alabama, Georgia, and
Mississippi. My observation was that Walmart and Dollar General stores somehow
coexist even in the smallest communities. I recall one Dollar General store in
Alabama that was literally (yes, in the literal sense of the word ;-)
a stone's throw from a Walmart Supercenter.
<< The biggest flaw is that there is barely any moat. >>
I think the moat, such as it is, may be the logistics infrastructure: small
stores, high frequency delivery, hub-and-spoke distribution. It helps that they
limit the number of products and focus on high-demand, consumable stuff (e.g.
cleaning products.)
Compared to Walmart, DG has faster restocking cycles and less idle inventory.
But I confess admiration for the shorts brave enough to place their bets.
-Rubic
