Business Strategy and Outlook
| Zain Akbari, CFA |Despite intensifying competition that we believe is diminishing its competitive edge, Dollar General's advantageously located store network, low-priced items, and leverageable supply and distribution capabilities should allow it to deliver economic returns. With a footprint focused on thinly populated areas that cannot support numerous retailers and make shipments to homes costly for a small basket (over 80% of items are priced at or below $5), we expect Dollar General to use its burgeoning scale and proximity to customers to economically deliver the convenience and affordability that its generally modest-income (roughly $40,000 annually, as a household) customers demand. The COVID-19 pandemic lifted sales, but we do not expect it to have a material long-term effect on the chain’s standing.