−Removed: We are among the largest discount retailers in the United States by number of stores, with 18,190 stores located in 47 states as of February 25, 2022, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States.
+Added: We are the largest discount retailer in the United States by number of stores, with 19,147 stores located in 47 U.S.
+Added: states and Mexico as of March 3, 2023, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States.
+Added: Our first store in Mexico opened in February of 2023.
We offer a broad selection of merchandise, including consumable items, seasonal items, home products and apparel.
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In November 2009 our common stock again became publicly traded on the New York Stock Exchange under the symbol “DG”, and in December 2013 the entity controlled by investment funds affiliated with KKR sold its remaining shares of our common stock.
−Removed: COVID-19 Pandemic
−Removed: Throughout 2020 and 2021, the COVID-19 (coronavirus) pandemic resulted in widespread and continuing impacts on the global economy and affected our business, as well as our customers, suppliers, and other business partners.
−Removed: In March 2020, we began seeing heightened demand from customers, particularly for consumable products such as paper, food and cleaning products.
−Removed: Shortly thereafter, we also saw a significant increase in demand for many non-consumable products, resulting in a significant overall sales mix shift into non-consumable categories in 2020.
−Removed: Overall, the mix of consumables to non-consumables sales in 2021 remained relatively consistent with 2020.
−Removed: Since 2020, we also have seen a shift in consumer shopping behavior towards trip consolidation, along with an increase in average transaction amounts.
−Removed: In 2020, we incurred significant expense related to the pandemic, including appreciation bonuses for retail, distribution and transportation employees and health and safety measures.
−Removed: Although some of these expenses continued in 2021, they were not as significant as in 2020.
−Removed: We expect to continue to be affected, although the extent and duration are unknown, by the COVID-19 pandemic and its effects on the economy (including governmental response thereto), including its impact on the global supply chain and increased product, distribution, transportation and other costs.
Our Business Model
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From 1990 through 2020, we achieved 31 consecutive years of positive same-store sales growth.
−Removed: As a result of the unusually high sales results we experienced in 2020, we did not achieve positive same-store sales growth in 2021.
−Removed: Notwithstanding the unusual circumstances of 2020 and 2021, we believe that this consistent growth over many years, which has taken place in a variety of economic conditions, is a result of our compelling value and convenience proposition, although no assurances can be given that we will achieve positive same-store sales growth in any given year.
+Added: Following unusually high sales results in 2020 during the height of the COVID pandemic, we did not achieve positive same-store sales growth in 2021.
+Added: However, we achieved positive same-store sales growth once again in 2022.
+Added: Notwithstanding the unusual circumstances of 2020 and 2021 resulting from the COVID pandemic, we believe that this consistent growth over many years, which has taken place in a variety of economic conditions, is a result of our compelling value and convenience proposition, although no assurances can be given that we will achieve positive same-store sales growth in any given year.
Compelling Value and Convenience Proposition.
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Every day!” ® summarizes our appeal to customers.
−Removed: We believe our ability to effectively deliver both value and convenience allows us to succeed in small markets with limited shopping alternatives, as well as in larger and more competitive markets.
+Added: We believe our ability to effectively deliver both value and convenience allows us to succeed in small markets with
+Added: limited shopping alternatives, as well as in larger and more competitive markets.
Our value and convenience proposition is evidenced by the following attributes of our business model:
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Substantial Growth Opportunities.
−Removed: We believe we have substantial long-term growth potential in the U.S., and we have identified significant opportunities to add new stores in both existing and new markets, which include our new pOpshelf concept.
+Added: We believe we have substantial long-term growth potential in the U.S., and we have identified significant opportunities to add new stores, including our pOpshelf concept, in both existing and new markets.
In addition, we have opportunities to relocate or remodel locations within our existing store base to better serve our customers.
+Added: Our pOpshelf concept represents an important growth opportunity as a unique small-box retail concept that focuses on categories such as seasonal and home décor, health and beauty, home cleaning supplies, and party and entertainment goods.
+Added: We have also identified international expansion as an important growth opportunity, with an initial focus on opening and operating stores in Mexico.
+Added: We opened our first Mi Súper Dollar General store in Mexico in February of 2023, and believe there is additional growth potential in Mexico in the years ahead.
Our attractive store economics, including a relatively low initial investment and simple, low-cost operating model, and our variety of store formats have allowed us to grow our store base to current levels and provide us significant opportunities to continue our profitable store growth strategy.
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Consumables is our largest merchandise category and includes paper and cleaning products (such as paper towels, bath tissue, paper dinnerware, trash and storage bags, disinfectants, and laundry);
−Removed: packaged food (such as
−Removed: cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar and flour);
−Removed: perishables (such as milk, eggs, bread, refrigerated and frozen food, beer and wine);
+Added: packaged food (such as cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar and flour);
+Added: perishables (such as milk, eggs, bread, refrigerated and frozen food, beer, wine and produce);
snacks (such as candy, cookies, crackers, salty snacks and carbonated beverages);
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The typical Dollar General store is operated by a store manager, one or more assistant store managers, and three or more sales associates.
−Removed: Our stores generally feature a low-cost, no frills building with limited maintenance capital, low operating costs, and a focused merchandise offering within a broad range of categories, allowing us to deliver low retail prices while generating strong cash flows and capital investment returns.
−Removed: Our stores currently average approximately 7,400 square feet of selling space, and approximately 75% of our stores are located in towns of 20,000 or fewer people.
−Removed: Beginning in 2021, our primary new store format averages approximately 8,500 square feet of selling space.
+Added: Our stores generally feature a low-cost, no frills building with limited capital requirements, low operating costs, and a focused merchandise offering within a broad range of categories, allowing us to deliver low retail prices while generating strong cash flows and capital investment returns.
+Added: Our stores currently average approximately 7,500 square feet of selling space, and over 80% of our stores are located in towns of 20,000 or fewer people.
+Added: Our primary new store format currently averages approximately 8,500 square feet of selling space.
We generally have had good success in locating suitable store sites in the past, and we believe that there is ample opportunity for new store growth in existing and new markets.
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We generally locate our stores and plan our merchandise selections to best serve the needs of our core customers, the low and fixed income households often underserved by other retailers (including grocers), and we are focused on helping them make the most of their spending dollars.
−Removed: At the same time, however, Dollar General shoppers from a wide range of income
−Removed: brackets and life stages appreciate our quality merchandise as well as our attractive value and convenience proposition.
+Added: At the same time, however, Dollar General shoppers from a wide range of income brackets and life stages appreciate our quality merchandise as well as our attractive value and convenience proposition.
Our Suppliers
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In 2020 and 2021, COVID-19 and its impacts caused disruptions in our supply chain, at times making it more difficult to obtain certain products in sufficient quantities to meet customer demand and increasing distribution and transportation costs.
−Removed: We anticipate these COVID-19 effects to persist to some degree, although the ultimate extent and duration of the COVID-19 pandemic and its effects are unknown.
−Removed: Prior to 2020, we had generally been able to obtain sufficient quantities of core merchandise and in cases where one or more of our current sources of supply became unavailable, we generally had been able to obtain alternative sources.
+Added: We began to see normalization in the global supply chain during 2022 and anticipate continuing improvement moving forward.
In situations where it becomes necessary to secure alternative sources, we may experience increased merchandise costs and supply chain lead time and expenses, a temporary reduction in store inventory levels, and reduced product selection or quality.
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In addition to our traditional distribution centers, we now operate multiple temperature-controlled distribution facilities in support of “DG Fresh”, our strategic, multi-phased shift to self-distribution of frozen and refrigerated goods, such as dairy, deli and frozen products.
−Removed: We regularly analyze and rebalance the network to ensure that it remains efficient and provides the service levels our stores require.
+Added: We regularly analyze and rebalance the network with a goal of ensuring that it remains efficient and provides the service levels our stores require.
See “—Properties” below for additional information pertaining to our distribution centers.
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In addition, vendors or third-party distributors deliver or ship certain food items and other merchandise directly to our stores.
+Added: In the second half of 2022, we experienced a temporary shortage of available warehouse capacity, primarily due to delays in opening temporary warehouse space.
+Added: This shortage resulted in a significant impact to our operating results due to increased costs associated with delays in unloading inventory into warehouse space, as well as inefficiencies in moving goods throughout our internal supply chain.
+Added: With the opening of three permanent distribution facilities in the fourth quarter of 2022, significant warehouse capacity is now available and has relieved the vast majority of these constraints.
The nature of our business is somewhat seasonal.
Generally, our operating profit has been greater in the fourth quarter, which includes the Christmas selling season, as compared with operating profit in each of the first three quarters of our fiscal year.
−Removed: In addition, our quarterly results can be affected by the timing of certain holidays, new store openings, remodels, relocations and store closings.
−Removed: Consumer behavior driven by the COVID-19 pandemic and its accompanying impacts has resulted in a departure from seasonal norms we have experienced in recent years and may continue to disrupt the historical quarterly cadence of our results of operations for an unknown period of time.
+Added: In addition, our quarterly results can be affected by the timing of certain holidays, new store openings, remodels, relocations, store closings, and weather patterns.
+Added: Management’s Discussion & Analysis of Financial Condition and Results of Operation” for further discussion of seasonality.
Our Competition
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Competition is intense and we believe it will continue to be so, with certain competitors reducing their store locations while others move into or increase their presence in our geographic and product markets and increase the availability of mobile, web-based and other digital technology to facilitate a more convenient and competitive online and in-store customer shopping experience.
−Removed: We believe that we differentiate ourselves from other forms of retailing by offering consistently low prices in a convenient, small-store format.
+Added: We believe that we differentiate ourselves from other forms of retailing by offering competitive prices in a convenient, small-store format.
We are able to maintain competitive prices due in part to our low-cost operating structure and the relatively limited assortment of products offered.
Purchasing large volumes of merchandise within our focused assortment in each merchandise category allows us to keep our average product costs low, contributing to our ability to offer competitive everyday low prices to our customers.
−Removed: See “—Our Business Model” above for further discussion of our competitive situation.
+Added: See “—Our Business Model” above and “Item 1A.
+Added: Risk Factors” for further discussion of our competitive situation.
Our Intellectual Property
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As a testament to our employee development efforts, in February 2021 we were inducted into Training magazine’s Hall of Fame, following two consecutive years as the magazine’s top training and development program and rounding out 10 consecutive years among its Top 100 list.
−Removed: In 2021, we estimate we invested over three million training hours in our employees to promote their education and development.
+Added: In 2022, we estimate we invested over four million training hours in our employees to promote their education and development.
+Added: We enhance our development programs each year based on the current needs of our employees and the business.
+Added: We offer a variety of differentiated programs, including mentorship, cohorts, and leader-led and experiential opportunities to ensure there is a path of development for all employees.
Our internal promotion rate helps us measure the success of our development programs.
−Removed: As of February 25, 2022, we employed approximately 163,000 full-time and part-time employees, including divisional and regional managers, district managers, store managers, other store personnel, and distribution center, fleet and administrative personnel.
−Removed: As of the end of 2021, approximately 76% of store managers and thousands of additional employees, including several members of our senior leadership, have been promoted from within our organization.
−Removed: To ensure we are creating an environment where our employees feel respected, safe, empowered, and motivated, we regularly monitor retention and engagement levels across the organization through a variety of means, working to understand what is important to our employees and how we can best continue to meet their evolving needs.
+Added: As of March 3, 2023, we employed more than 170,000 full-time and part-time employees, including divisional and regional managers, district managers, store managers, other store personnel, and distribution center, fleet and administrative personnel.
+Added: As of the end of 2022, more than 70% of store managers and thousands of additional employees, including several members of our senior leadership, have been promoted from within our organization.
+Added: We strive to create an environment where our employees feel respected, safe, empowered, and valued.
+Added: We regularly monitor retention and engagement levels across the organization through a variety of means, working to understand what is important to our employees and how we can best continue to meet their evolving needs.
Compliance with Governmental Regulations
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and environmental compliance.
−Removed: Although we routinely incur significant costs in complying with the laws and regulations applicable to the Company, and we can make no guarantees that future such costs will not be material, to date, compliance with these laws, rules and regulations has not had a material adverse effect on our capital expenditures, earnings or competitive position.
+Added: We routinely incur significant compliance related costs, both direct and indirect, including investments in store standards and labor such as our approximately $100 million investment planned for 2023, which we believe to be material.
+Added: Although we can make no guarantees that other future such costs will not be material, to date, other than the investment referenced above, compliance with these laws, rules and regulations has not had a material effect on our capital expenditures, earnings or competitive position.
Many of our entry-level store employees are paid at rates in line with the applicable state minimum wage, and consequently, in certain situations, increases to such wage rates have increased our labor costs.
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Additionally, if significant changes in the federal, state or foreign corporate tax rates occur in the future, such change could adversely affect our overall effective tax rate and earnings.
−Removed: See “Risk Factors” in Part I, Item 1A for additional information regarding government regulations that could impact our business.
+Added: See “Item 1A.
+Added: Risk Factors” for additional information regarding government regulations that could impact our business.
Available Information
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.