Walmarts vs Dollar General

[cutehog48]

Thoughts....does one feel that the recent closing of the small town neighborhood markets by Walmart have to do with competition from Dollar General? These stores are everywhere now. I wished I had bought stock in them years ago.

[DeltaBoy]

Dollar General going to have to expand into providing Groceries to fill the niche left by this Walmart Neighborhood Market Fiasco.

[DLUXHOG]

Dollar General usually targets LMI (Low to Moderate income) demographics.....   I'm wouldn't bet on stability.....

[DeltaBoy]

Dollar General been growing quite a bit down here in DFW.  They are showing up in places I never expected.

[cutehog48]

Dollar Generals do sell groceries now.  They have several freezers plus basic needs.   I know I try to shop there and Kroger instead of Walmart.

I counted 15 stores just on the way to the beach one summer.

[Rocky&Boarwinkle]

Freds hasn't built as many stores, but they tend to be larger and offer a more full choice on groceries and drugstore type items.

[DeltaBoy]

Freds hasn't built as many stores, but they tend to be larger and offer a more full choice on groceries and drugstore type items.

I miss when my home town had a Freds.

[BigBrandonAllenFan]

https://www.google.com/?gws_rd=ssl#q=dollar+general+stock+price+chart

DG stock was around $22 per share in 2010 just prior to their marked expansion plans.  It made a steady climb for 5 years and peaked at $80 per share in 2015, then in the last 1/4 of 2015, the stock took a quick 25% plunge to $60 per share.  This drop basically coincided with the overall market decline. 

Now, just since the Wal Mart store closures announcement, the stock has quickly jumped right back up to $75 per share, and climbing, beginning the very day of the Wal Mart announcement.  DG stock will probably reach near $90 per share at some point in 2016.... I won't be surprised to see a 2 for 1 stock split in the next year or so.

So yes, by chart evidence, I'd say the Wal Mart closings have had a profound effect on DG stock.  (see chart link above)

And I can tell you this... I live in a small town Arkansas area where the 5 year old Dollar General store is 3 miles from my house and the Neighborhood Market is 8 miles away.  We spend 10 times the money at DG than we spend at the Neighborhood Market.

[BigoBoys]

This was a test, a 100 store test.  The test proved too labor intensive, required too many people for an operation that doesn't have as good an ROI as a Neighborhood Market.

[Mike_e]

Dollar General seems to be following the Walgreens plan.  Put one on every available corner.

Sheer volume will likely keep them solvent but where their stock's ultimate level is is best left to another to guess.

[Pulled(PP)pork]

Freds hasn't built as many stores, but they tend to be larger and offer a more full choice on groceries and drugstore type items.

both sell junk

worse junk than wm


PP

[pigture perfect]

DG is quite a bit cheaper than WM on grocery items. Limited tho they ay be.

[Atlhogfan1]

DG is quite a bit cheaper than WM on grocery items. Limited tho they ay be.

Part of that is size/content/count.  DG is willing to sell a lower/smaller size to have a lower or competitive price.  DG is a store for smaller shopping trips and is often used to get people between larger grocery shops especially the lower income shoppers.  Smaller size/count is okay to get them through till they have the money to buy more.  Another part is funded markdowns/specials.  WM believes in the everyday low price model.  DG very much goes after funding from suppliers.  Before this huge growth, it didn't matter much because they were still a small % of the business vs other retailers.  Now they are having an impact and suppliers are beginning to reconsider their impact and actually consider what they are being asked for and are giving.  It costs more to do business with DG but they still want to operate like they have 6K stores instead of 12K.  As they grow, they'll experience different pains.  Can't keep being the takers they are. 

[pigture perfect]

Yes, I understand that.

[kodiakisland]

Maybe I missed the Neighborhood Markets closing, but where and how many?  All I know of is the Walmart Express closings.  If you're talking about that, the two aren't the same.  The Walmart Express was a worthless attempt at a store.  It never had everything I needed, unless all I needed was milk and bread.  It had about half the groceries and some non food crap, but it made no sense as to what they stocked.  The store was a poor attempt at something that was doomed to fail from the beginning.

Neighborhood markets on the other hand are what a grocery store should be.  I rarely go to a supercenter anymore and do almost all my grocery shopping at a Neighborhood market.

[DLUXHOG]

DG is quite a bit cheaper than WM on grocery items. Limited tho they ay be.

That's an understatement.....  Anyone that truly believes DG is a head to head competitor of WM, isn't sober.....

[Pulled(PP)pork]

Maybe I missed the Neighborhood Markets closing, but where and how many?  All I know of is the Walmart Express closings.  If you're talking about that, the two aren't the same.  The Walmart Express was a worthless attempt at a store.  It never had everything I needed, unless all I needed was milk and bread.  It had about half the groceries and some non food crap, but it made no sense as to what they stocked.  The store was a poor attempt at something that was doomed to fail from the beginning.

Neighborhood markets on the other hand are what a grocery store should be.  I rarely go to a supercenter anymore and do almost all my grocery shopping at a Neighborhood market.

all of them


PP

[Atlhogfan1]

WM is opening new NM's.

[Pulled(PP)pork]

WM is opening new NM's.

oh, thought they were doing away with that concept all together and going back to SWM


PP

[Atlhogfan1]

oh, thought they were doing away with that concept all together and going back to SWM


PP

They closed some NM's in January.  Their focus for now is going to dotcom.  They are in a position right now of not knowing which direction to go to grow.  But they know Amazon and other dotcoms are taking business from brick and mortar. 

[DeltaBoy]

All I know it this  DG Open Field line of Blue Jeans are solid and fit me well at $10 bucks a pair. With my system of clothes rotation I gotten 5 years before the first pin hole appeared this fall.  I will fix it and move that pair to my yard work section and get another pair.

[BigBrandonAllenFan]

All I know it this  DG Open Field line of Blue Jeans are solid and fit me well at $10 bucks a pair. With my system of clothes rotation I gotten 5 years before the first pin hole appeared this fall.  I will fix it and move that pair to my yard work section and get another pair.

[kodiakisland]

all of them


PP

What?  I shopped at a NM today.  Pretty sure it was not closed.  I think some of you are confusing Neighborhood Markets with WalMart Express.  They are not the same thing.

[DLUXHOG]

all of them


PP

WNM are all open in Dallas area..........

[ricepig]

What?  I shopped at a NM today.  Pretty sure it was not closed.  I think some of you are confusing Neighborhood Markets with WalMart Express.  They are not the same thing.

Don't confuse them. I'm like some others, I now shop at my Neighborhood Market 95% of the time for my WM type things. I wasn't going to WM to buy clothes, TV, or a blender. It's the same distance from the house as the SuperCenter, it just took a little time to find of few things the first few times.

[Pulled(PP)pork]

WNM are all open in Dallas area..........

What?  I shopped at a NM today.  Pretty sure it was not closed.  I think some of you are confusing Neighborhood Markets with WalMart Express.  They are not the same thing.

I corrected myself


PP

[hog.goblin]

What?  I shopped at a NM today.  Pretty sure it was not closed.  I think some of you are confusing Neighborhood Markets with WalMart Express.  They are not the same thing.

This

WM is focusing on NM and dot.com

doing away with WExpress and slowing the growth of SC's.

Will be interesting to see what Whole Foods does to the local SC.  The inside is just amazing.

[DeltaBoy]

Since Wal mart came to the town I worked in stayed open for 18 months and ran the only grocery store in town out of business then with a weeks notice they close I still upset with Walmart.

[BigBrandonAllenFan]

Since Wal mart came to the town I worked in stayed open for 18 months and ran the only grocery store in town out of business then with a weeks notice they close I still upset with Walmart.

If you're in the north half of Arkansas, Harp's could be there soon.  Being "Delta Boy", I'm guessing you're probably not in the north half of Arkansas.

We have Harp's and a Wally Neighbor Market.  We spend probably 85% vs 15% in Harp's over Wally NM.  Harp's stores are nice.  They have great produce and meats, along with botanicals and gardening, a cover all delicatessen, low priced gasoline with credits for certain purchases in store, a pharmacy, and even a convenience store register on the side door.  They are clean, well stocked, and well staffed.

[BigBrandonAllenFan]

Dollar General usually targets LMI (Low to Moderate income) demographics.....   I'm wouldn't bet on stability.....

I wouldn't say that at all. 

In Wooster, (5 miles west of Greenbrier), there is one convenience store and a Dollar General.  That's it for businesses. 

If you get in the car line at Wooster Elementary, a solid 75% of the vehicles are shiny GMC SUV's and Chevy 4x4s.  If you're in a compact car you appear disappeared.  There are very nice new neighborhoods of upper middle class pricing in the area that have been built in the last 10 years.  Those folks stop at the Dollar General just right down the road for milk and stuff on their way home like everybody else.  It's nothing to do with a pride thing.  It's simply convenient and efficient.

For Dollar General, it is excellent marketing strategy.  A quadrupled stock price since 2010 is hard core proof of that fact. 

   

[ricepig]

If you're in the north half of Arkansas, Harp's could be there soon.  Being "Delta Boy", I'm guessing you're probably not in the north half of Arkansas.

We have Harp's and a Wally Neighbor Market.  We spend probably 85% vs 15% in Harp's over Wally NM.  Harp's stores are nice.  They have great produce and meats, along with botanicals and gardening, a cover all delicatessen, low priced gasoline with credits for certain purchases in store, a pharmacy, and even a convenience store register on the side door.  They are clean, well stocked, and well staffed.

A Kroger's Marketplace will make you think Harp's is a convenience store. We have both, both new, and there isn't a comparison, and the Harp's is woefully under staffed. I've never seen more than two checkout lanes open, it's ridiculous.

[hog.goblin]

If you're in the north half of Arkansas, Harp's could be there soon.  Being "Delta Boy", I'm guessing you're probably not in the north half of Arkansas.

We have Harp's and a Wally Neighbor Market.  We spend probably 85% vs 15% in Harp's over Wally NM.  Harp's stores are nice.  They have great produce and meats, along with botanicals and gardening, a cover all delicatessen, low priced gasoline with credits for certain purchases in store, a pharmacy, and even a convenience store register on the side door.  They are clean, well stocked, and well staffed.

Ive lived in NWA since 1991.  I would like to know where a harps like you described is. 

I go there often because they are empty.  I can get in and out fast for the one thing I need.  But they have no selection, are dirty, and I'm lucky to see two employees.

[ricepig]

Ive lived in NWA since 1991.  I would like to know where a harps like you described is. 

I go there often because they are empty.  I can get in and out fast for the one thing I need.  But they have no selection, are dirty, and I'm lucky to see two employees.

Ours is new, nice, and very clean. I put in an offer on it a couple of years ago, but someone wanted it worse. They ended up getting it for a 6.2% CAP with a 3N lease, I was greedy and wanted 7%.

[hog.goblin]

Ours is new, nice, and very clean. I put in an offer on it a couple of years ago, but someone wanted it worse. They ended up getting it for a 6.2% CAP with a 3N lease, I was greedy and wanted 7%.

New makes a difference.

You have to draw the line somewhere.  Wouldn't call 7% greedy, particularly if you have other opportunities

[ricepig]

New makes a difference.

You have to draw the line somewhere.  Wouldn't call 7% greedy, particularly if you have other opportunities

It's good in the commercial real estate business, especially with a 15yr lease with a quality company on a new building. I don't like specs, or property with "new" companies. I could buy about every Dollar General in the state for a 9-11% CAP rate, however, they're older and generally have less than 3 years left on the lease. I prefer farmland, but it's not worth the money at current land prices in relation to commodity prices.

[BigBrandonAllenFan]

A Kroger's Marketplace will make you think Harp's is a convenience store. We have both, both new, and there isn't a comparison, and the Harp's is woefully under staffed. I've never seen more than two checkout lanes open, it's ridiculous.

If I'm Harp's, as for marketing strategy, I'd stay out of the Kroger markets for the most part.  The Harp's in Conway does fairly well because they are the only grocery store on the east side of town.  Kroger is #1 in Groceries in Arkansas...No big secret.  Harp's can't compete head to head on pricing with Kroger.  My first job at 16 was a sack boy at Kroger.  My dad was a Kroger store manager for years.  We both then were in the food brokerage business, and Kroger was our major player no doubt. 

For towns like Greenbrier though, Harp's is a perfect fit, and they have a steady flow of business, which makes for the better staffing I'm sure.  We love ours.  We even bought all of our garden sets at Harp's.     

[BigBrandonAllenFan]

Ive lived in NWA since 1991.  I would like to know where a harps like you described is. 

I go there often because they are empty.  I can get in and out fast for the one thing I need.  But they have no selection, are dirty, and I'm lucky to see two employees.

Yeah, I used to call on those Harp's stores like the one in Rogers.  Those stores were mostly existing site purchases/leases and Harp's simply moved into the older buildings.  The newly built Harp's stores however are quite the opposite. Harp's has actually done a nice job of building capital and re-investing.

[DeltaBoy]

If you're in the north half of Arkansas, Harp's could be there soon.  Being "Delta Boy", I'm guessing you're probably not in the north half of Arkansas.

We have Harp's and a Wally Neighbor Market.  We spend probably 85% vs 15% in Harp's over Wally NM.  Harp's stores are nice.  They have great produce and meats, along with botanicals and gardening, a cover all delicatessen, low priced gasoline with credits for certain purchases in store, a pharmacy, and even a convenience store register on the side door.  They are clean, well stocked, and well staffed.

I am in DFW Texas and the small town I work in was crippled by Wal mart for about a year but we got a new grocery store and things are better.