Dollar General is a brand that is in rural markets-
They have positioned stores across the country with a goal of 5000 stores delivering fresh food market options-
The positioning of
The location of the stores is closer to the rural customers that used to travel over 1+ hour to shop at a Walmart because all of the smaller B&M grocers have been put out of business.
Their current growth rate will increase even
The buyer experience inside of a (DG) store is more personable which suburban/rural buyers prefer.
The selection is ample
The placing of the stores and footprint was also intelligently selected.
The logistics of the store routes properly established. Low waste in delivering goods to the stores.
I would just like to emphasize that in a recession this business will
They are not selling (Dollar items) they have migrated to being a small grocery in the last (10 miles.)
Proximity to consumer in recession is of utmost importance.
The stores are organized enough to keep the consumers happy with the experience in store.
(This will hurt Walmart exponentially and fast) ~More on this later~
Marketing- (DG) could go on a aggressive marketing campaign in rural markets
Their supply chain isn't heavily influenced by foreign markets and
Questionable- I am not sure their loss prevention has been adequately built out as they scaled up stores - This can be fixed easily if it becomes a problem during recession.
Local leadership training of management and team
With those questionable items being said- Most of the other
These customers don't want anything fancy they just need a consistent experience with the products they want.
I agree that (DG) is a buy however my target is $170 Jan- 2021
This price target will change depending on market and overall economy.
However the worse the economy gets my target
At time of this analysis -$127.28 (DG)