No. of Recommendations: 3
But what that narrative fails to explain is why there was a significant and sudden drop in profitability and operating margins in the last two quarters, given that this kind of saturation has existed in the DG's primary markets for a number of years.
Well, the article does note what I consider to have been an important macro prop to DG's revenues (and profits) in recent years, one that has now gone away--namely, short-term pandemic income supports to low-income households. (I work with low-income households in Detroit, and the demise of those supports has been a big deal to them.)
That and the approaching ceiling on store expansion that hits pretty much every retailer eventually were the reasons I sold for a modest loss when the Bloomberg story hit. DG may be a good investment at some point, but I don't see the story changing materially in the immediate future.
But that's just me.
