What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-03-25 compared with 2023-03-24 · 31 added, 40 removed, 145 unchanged (33% of the section changed)

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states and Mexico as of March 1, 2024, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States.

Our first store in Mexico opened in February of 2023.

Our first stores in Mexico opened in 2023.

We offer a broad selection of merchandise, including consumable items, seasonal items, home products and apparel.

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For more information on these operating priorities, see the “Executive Overview” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in Part II, Item 7 of this report.

From 1990 through 2020, we achieved 31 consecutive years of positive same-store sales growth.

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.

However, we achieved positive same-store sales growth once again in 2022.

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.

We have achieved positive same-store sales growth each year since 1990, with the exception of 2021 which followed unusually high sales results in 2020 during the height of 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.

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.

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.

Our value and convenience proposition is evidenced by the following attributes of our business model:

● Everyday Low Prices on Quality Merchandise.

Our research indicates that we offer a price advantage over most food and drug retailers and that our prices are competitive with even the largest discount retailers.

Our research indicates that we offer a price advantage over most food and drug retailers and that our prices are competitive with even the

largest discount retailers.

Our ability to offer everyday low prices on quality merchandise is supported by our low-cost operating structure and our strategy to maintain a limited number of items per merchandise category, which we believe helps us maintain strong purchasing power.

We offer nationally advertised brands at these everyday low prices in addition to offering our own private brands at substantially lower prices.

We offer nationally advertised brands at these everyday low prices in addition to offering our own private brands, often at substantially lower prices.

● Convenient Locations.

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We strive to provide customers with a highly convenient, easy to navigate shopping experience.

Our small-box stores make it easier to get in and out quickly, and our digital tools and offerings help drive even greater convenience and additional access points.

Our product offering includes most necessities, such as basic packaged and refrigerated or frozen food and dairy products, cleaning supplies, paper products, health and beauty care items, greeting cards and other stationery items, basic apparel, housewares, hardware and automotive supplies, among others.

Our small-box stores are designed to make it easier to get in and out quickly, and our digital tools and offerings help drive even greater convenience and additional access points.

Our product offering includes most necessities, such as basic packaged and refrigerated or frozen food products, dairy products, cleaning supplies, paper products, health and beauty care items, greeting cards and other stationery items, basic apparel, housewares, hardware and automotive supplies, among others.

Our convenient hours and broad merchandise offering allow our customers to fulfill their requirements for basic goods and minimize their need to shop elsewhere.

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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.

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.

We have also identified international expansion as an important growth opportunity, with an initial focus on opening and operating stores in Mexico.

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.

In addition, we have opportunities to relocate, remodel or convert locations within our existing store base to better serve our customers.

Our pOpshelf concept, which we continue to evaluate and evolve, represents an additional 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.

We have also identified international expansion, with an initial focus on Mexico, as an opportunity for growth.

We opened our first Mi Súper Dollar General stores in Mexico in 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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We offer a wide selection of nationally advertised brands from leading manufacturers.

Additionally, our private brand products offer even greater value with options to purchase both products that are of comparable quality to national brands as well as opening price point items, each at substantial discounts to the national brands.

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);

packaged food (such as cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar and flour);

packaged food (such as cereals, pasta, canned soups, canned meats, fruits and vegetables, condiments, spices, sugar and flour);

perishables (such as milk, eggs, bread, refrigerated and frozen food, beer, wine and produce);

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Home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, bed and bath soft goods.

Apparel includes casual everyday apparel for infants, toddlers, girls, boys, women and men, as well as socks, underwear, disposable diapers, shoes and accessories.

Apparel includes basic items for infants, toddlers, girls, boys, women and men, as well as socks, underwear, disposable diapers, shoes and accessories.

The percentage of net sales of each of our four categories of merchandise for the fiscal years indicated below was as follows:

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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.

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.

Our primary new store format currently averages approximately 8,500 square feet of selling space.

Our stores currently average approximately 7,500 square feet of selling space, and approximately 80% of our stores are located in towns of 20,000 or fewer people.

Our primary new store formats currently average selling space of approximately 8,500 square feet and 9,500 square feet.

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 directly imported approximately 4% of our purchases at cost in 2023.

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.

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.

An inability to obtain alternative sources could adversely affect our sales.

Distribution and Transportation

Our stores are currently supported by distribution centers for both refrigerated and non-refrigerated merchandise located strategically throughout our geographic footprint.

Our stores are currently supported by distribution centers for frozen, refrigerated and non-refrigerated merchandise located strategically throughout our geographic footprint.

We lease additional temporary warehouse space as necessary to support our distribution needs.

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.

We regularly analyze and rebalance the network with a goal of ensuring that it remains efficient and provides the service levels our stores require.

In addition to our traditional distribution centers, we operate multiple temperature-controlled distribution facilities in support of our self-distribution of frozen and refrigerated goods, such as dairy, deli and frozen products.

We regularly analyze and rebalance the distribution 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.

In the second half of 2022, we experienced a temporary shortage of available warehouse capacity, primarily due to delays in opening temporary warehouse space.

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.

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.

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Our direct competitors include Family Dollar, Dollar Tree, Big Lots, 99 Cents Only and various local, independent operators, as well as Walmart, Target, Kroger, Aldi, Walgreens, CVS, and Rite Aid, among others.

Certain of our competitors have greater financial, distribution,

marketing and other resources than we do and may be able to secure better arrangements from suppliers than we can.

Certain of our competitors have greater financial, distribution, marketing and other resources than we do and may be able to secure better arrangements from suppliers than we can.

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.

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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.

See “—Our Business Model” above and “Item 1A.

See “Item 1A.

Risk Factors” for further discussion of our competitive situation.

Our Intellectual Property

We own marks that are registered with the United States Patent and Trademark Office and are protected under applicable intellectual property laws, including, without limitation, Dollar General®, DG®, Clover Valley®, trueliving®, and p Opshelf® along with variations and formatives of these trademarks.

We own marks that are registered with the United States Patent and Trademark Office and are protected under applicable intellectual property laws, including, without limitation, Dollar General®, DG®, Clover Valley®, trueliving®, pOpshelf®, and Mi Super Dollar General® along with variations and formatives of these trademarks.

We attempt to obtain registration of our trademarks whenever practicable and to pursue vigorously any infringement of those marks.

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paid vacation;

employee assistance program with access to legal assistance and counseling;

employee assistance programs with access to legal assistance and counseling;

healthy lifestyle and disease management programs;

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Our internal promotion rate helps us measure the success of our development programs.

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.

As of March 1, 2024, we employed approximately 185,800 full-time and part-time employees, including divisional and regional managers, district managers, store managers, other store employees, and distribution center, fleet and administrative employees.

As of the end of 2023, 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.

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anti-bribery;

financial reporting and disclosure;

financial reporting and disclosure, including disclosures related to

environmental, social and governance (“ESG”) matters;

antitrust and fair competition;

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and environmental compliance.

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.

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.

We routinely incur significant compliance-related costs, both direct and indirect, including investments in store standards and labor, such as our approximately $150 million labor investment in 2023.

Although we may incur additional material compliance-related costs in the future, to date, other than the investments 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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The information on our website is not incorporated by reference into, and is not a part of, this Form 10-K.

We file with or furnish to the Securities and Exchange Commission (the “SEC”) annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, proxy statements and annual reports to shareholders, and, from time to time, registration statements and other documents.

These documents are available free of charge to investors on or through the Investor Information section of our website (https://investor.dollargeneral.com) as soon as reasonably practicable after we electronically file them with or furnish them to the SEC.

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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.

What changed 10-K

Item 1. Business