Share to twitterDollar General was the biggest S&P decliner on Thursday after it gave a disappointing profit outlook for the year. After reaching a record high on Wednesday, Dollar General shares sank 7.5% on Thursday after the largest U.S. dollar-store chain gave a disappointing profit outlook, thanks in part to its plans to increase spending on areas including self-checkout and to take distribution of fresh grocery items in-house.
However, the demand didn’t come without cost: The retailer's gross margin narrowed to 31.1%, from 32.1%, as it increased discounts. And keeping prices low to attract shoppers will remain key for discounters. Vasos said that while Dollar General’s core customer is “feeling better about having a little bit more money in her pocket,” that’s coming from “working more hours, and in some cases, multiple jobs.”said.While fashion and other retailers including Victoria’s Secret and Gap brand are shrinking their physical footprints, Dollar General—which already had 15,370 stores in the U.S. as of Feb.
“We expect DG Fresh to allow us to do a better job of tailoring our product selection to fit the needs of our customers, particularly in rural areas,” Vasos said.
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