Dollar General Corporation
Dollar General Corporation is a leading discount retailer of quality general merchandise
at everyday low prices. Through conveniently located stores, the Company offers
a focused assortment of consumable basic merchandise including health and beauty
aids, packaged food products, home cleaning supplies, housewares, stationery,
seasonal goods, basic clothing and domestics. Dollar General stores serve primarily
low-, middle- and fixed-income families.
Our Merchandise. The Company is committed to offering a focused assortment
of quality, consumable basic merchandise in a number of core categories, such
as health and beauty aids, packaged food products, home cleaning supplies, housewares,
stationery, seasonal goods, basic clothing and domestics. Because the Company
offers a focused assortment of consumable basic merchandise, customers are able
to shop at Dollar General stores for their everyday household needs. In 2003,
the average customer purchase was $8.56.
Our Prices. The Company distributes quality, consumable basic merchandise at
everyday low prices. Its strategy of a low-cost operating structure and a focused
assortment of merchandise allows the Company to offer quality merchandise at
highly competitive prices. As part of this strategy, the Company emphasizes
even-dollar price points. In the typical Dollar General store, the majority
of the products are priced at $10 or less, with approximately 33% of the products
priced at $1 or less.
Our Cost Controls. The Company emphasizes aggressive management of its overhead
cost structure. Additionally, the Company seeks to locate stores in neighborhoods
where rental and operating costs are relatively low. The Company attempts to
control operating costs by implementing new technology where feasible. Examples
of this strategy in 2003 and 2002 include improvements to the Company’s supply
chain and warehousing systems, the introduction of loss prevention software
designed to identify unusual cash register transactions and the implementation
of a new merchandise planning system designed to assist its merchants with their
purchasing and store allocation decisions.
The typical Dollar General store is operated by a manager, an assistant manager
and two or more sales clerks. Approximately 56% of the Company’s stores are
located in strip shopping centers, 41% are in freestanding buildings and 3%
are in downtown buildings.
Competition
The Company is engaged in a highly competitive business with respect to price,
store location, merchandise quality, assortment and presentation, in-stock consistency,
and customer service. The Company competes with discount stores and with many
other retailers, including mass merchandise, grocery, drug, convenience, variety
and other specialty stores. Some of the nation’s largest retail companies operate
stores in areas where the Company operates. The Company’s direct competitors
in the dollar store retail category include Family Dollar, Dollar Tree, Fred’s
and various local, independent operators. Competitors from other retail categories
include CVS, Rite Aid, Walgreens, Eckerd, Wal-Mart and Kmart. Some of the Company’s
competitors from outside the dollar store segment are better capitalized than
the Company.
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