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- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 6
No. of Recommendations: 7
I am fully aware that our two dominant shrewd posters led investors here, and I'm repeatedly reminded that they retain their lofty status regardless of accuracy. DG was an obvious call long ago and continues to be so. It is a challenged business model where management seems to be on the path of "If it isn't sustainable...just grow it anyway."
DG isn't a stand alone store in a rural community; it is a one-every-ten-miles over-capacity to-close-to-WalMart hell-hole.
No. of Recommendations: 6
Cross-posts from the Falling Knives board, since this is the more logical place to put this discussion:
https://www.shrewdm.com/MB?pid=842885149and
https://www.shrewdm.com/MB?pid=557151371:
“We made important progress on our Back to Basics plan in the second quarter,” said Todd Vasos, Dollar General’s chief executive officer. “However, despite advancing several of our operational goals and driving positive traffic growth, we are not satisfied with our financial results, including top line results below our expectations for the quarter.”It's pretty easy to see why the shares are down $30, to $94. Same store sales were up 0.5%, despite 2.5% inflation, so falling behind in real terms. Shift to lower margin food continues. Theft getting worse, not better. Projected full year EPS of $5.50 to $6.20, compared to its previous expectation of $6.80 to $7.55. Even at $93/share, if they hit the midpoint of their 2024 target, $5.85, that represents 16 times earnings. You have to really believe that Vasos is going to be able to turn things around to want this investment, even at the new, lower price, and I don't see any reason to believe that. Give me some reason to believe, or a price more like 10 times earnings ($60?) and I would think about it. But I am closer to dealraker's pessimistic view, too close to Walmart, and that will get worse as they keep (for some reason?) expanding their store count.
dtb
No. of Recommendations: 1
No. of Recommendations: 3
Number of Dollar General stores in the United States in 2024
https://www.scrapehero.com/location-reports/Dollar...
Crazy how many of them there are! The above link indicates that in some states, like Alabama, Kentucky and Tennessee, there is a DG store for every 5-6k residents. They have more than 20,000 stores already, and want to open another 800 this year. Dollar Tree and Family Dollar have over 16,000 stores, and there are 5000 Walmarts too. Walmart says 90% of Americans live within 10 miles of a Walmart. And then there's Amazon...
I guess a lot of this has been true for a long time, and dollar stores have generally done well, even if they can't really compete with Walmart on price. But to what extent are they just starting to cannibalize each other?
No. of Recommendations: 1
They are building a "Dollar General Market" about 5 miles from the DG store just outside of our community gate. Just about finished, getting close to stocking up and opening.
People have been asking the DG store if they will close when the DG Market opens, and they say No, they will remain. This store is in the same strip mall parking lot as a DollarTree/FamilyDOllar.
No. of Recommendations: 0
So now being in the stage where discovery re-starts, the stage just before that of "I bought more at the bottom" if the stock price rises, the press ran over and taggedan interview with dealraker:
Questioner: "Whut ya think bro?"
dealraker: "Same."
Questioner: "Same whut?"
dealraker: "Same ole thang sir, seems the story is different than management states...at least to little ole me. Others are the experts here, I just claim, at least at times, to carry a tad of common sense as to what seems obvious."
Questioner: "Whut's that?"
dealraker: "Managment...and ALL analysts, state the business model is rural stores in remote locations."
Questioner: "And..."
dealraker: "Seems to me a near panic store build out anywhere and everywhere."
Questioner: "And..."
dealraker: "I'd say the model is store density, not remote locations."
Questioner: "And what else."
dealraker: "Nothin else."
No. of Recommendations: 0
The interesting thing that Angela and I notice is that the 21 DG's in our 20 miles from the house area are characterized by the more recent ones all being within 6 to 1 mile of a WalMart (there are two in this area). Yep they are building close and closer to the big guys.
If it works to do this? Well, they knew something we didn't.
No. of Recommendations: 4
Compare the parking at the Walmart vs. the DG.
You can get in and out with your purchase at DG before you get get from your car to the door of Walmart.
No. of Recommendations: 2
You can get in and out with your purchase at DG before you get get from your car to the door of Walmart.
So true, especially if you don’t waste time paying for what you take.
No. of Recommendations: 0
So true, especially if you don’t waste time paying for what you take.
LOL.
One time sink is when you have to ring the bell at the register and wait for the (sole) employee to stop stocking the shelves and come up to ring you out.[*]
The Dollar Tree/Family Dollar in the same parking lot at least almost always has 1 or 2 people at the front. Rarely do you need to ring the bell.
Thing is, it's usually different people each week. The employee turnover is massive.
* Note that we are a 17,000 population gated community in the mountains (the stores are just outside the gate) and the nearest, um, diverse population is 25 miles away.
The DT/FD there has bars on the windows & doors.
