An analyst said, “(this announced 2011 expansion) . . . is in the face of the street’s perception
lately that Dollar General and the other dollar stores have had their day. The Street’s view is
that Dollar General and the others will lose the middle income customers they’ve gained as
the economy continues to grow stronger.”6
The analyst further stated, “(third quarter) . . . declining growth rate is interpreted on the
Street as a trend that will continue. However, investors with a longer-term view might see the
same news with different eyes.”7
Another analyst said, “The dollar stores have included more national brands in their
merchandise in a move to retain the new higher income customer and keep them coming back
long after the recession has passed.” He further stated, “Also, in a development the (Wall)
Street dismissed, higher inflation on some of the dollar store merchandise is leading to . . .
(lower store margins).”8
Anthony Chukunba, BB&T analyst, said, “Even though the economy is starting to
recover, consumers will continue to look for ways to save money.” Management of Dollar
General would agree with this analyst. The management also feels the company’s enhanced
merchandise with more national brands at a lower cost was a strong magnet to draw customers
into their store.9
An analyst said the crucial factor in the present depressed economy was the hiring of
employees with wages to support a family, and not jobs at minimum wages and no health care.
If the former occurs, this plays into the customers who will shop at Dollar General.
According to the Federal Reserve Chairman, Ben S. Bernanke, wages in 2010 increased
only 1.7%. The country needed to add 230,000 jobs just to keep up with the growth in the yearly population (college and high school graduates, etc.). If inflation returned to the
economy, wages must exceed the annual wage increase so consumers would have more
money to spend.
The U.S unemployment rate in January, 2011 was around 9.4%–9.6%. The actual total
unemployment rate was 16.6%.10