Why Walmart Should Worry About Dollar General's Success
Although Dollar General (NYSE: DG) and Walmart (NYSE: WMT) are both technically in the same general merchandise retailing arena, they're not quite seen as head-to-head competitors. Walmart operates fewer but bigger stores, and Dollar General's strategy involves establishing more, smaller remote locations where competition is minimal. Dollar General stores are meant to offer the basics in a convenient format.
The world's biggest retailer may want to look over its shoulder, though. Dollar General is plowing through the so-called retail apocalypse like it's not even happening. It's able to do so because it's doing so many things right. Though not an existential threat, Dollar General could end up spoiling Walmart's plans for unfettered growth.
Last quarter, Dollar General's $7 billion in revenue marked an 8.9% year-over-year improvement. Per-share profits rose 12.7%, growing from $1.26 a year earlier to $1.42 this time around. Most impressive of all, however, was the enviable average 4.6% increase in same-store sales.
Source Fool.com
