Dollar General Corp (NYSE DG) hasn’t been very exciting for investors since it started this year. This is largely due to concerns that the company will lose market share to Walmart Inc (NYSE DG).
Walmart has focused its attention on the lower- and middle-income households over the last few quarters. Recent reports indicate that this strategy is beginning to pay off.
Jim Cramer, the famous investor, says that Dollar General can do something to protect itself from WMT taking its share.
In a recent appearance on CNBC, he said that the answer is to be smart when choosing real estate.
How can Dollar General protect market share?
Dollar General is a well-known chain of discount stores throughout the United States.
Priority Store is still a great place to shop for bargains.
According to Mad Money, while the focus has been on its loss of market share to Walmart, it actually does better in areas where there is no Walmart nearby.
DG has already announced plans to continue its rapid pace of opening new shops in 2025.
He said on “Mad Dash” that all it takes is to choose the real estate wisely, and open a shop that’s not too close to a Walmart.
DG reported solid sales in its fourth quarter
Jim Cramer is still bullish on Dollar General, not only because Dollar General reported strong sales in its Q4 but also because it issued positive long-term guidance.
DG expects to see its earnings per share grow by more 10% starting in 2026.
Street had instead called for an increase of 8.75%.
The retail firm also plans to remodel thousands of its stores, and close nearly 100 of the underperforming namesake outlets in order to prepare for an upcoming recession.
Dollar General’s stock is more attractive to buy at current levels because of its dividend yield of 2.95%.
What a slowdown in consumer spending could mean for Dollar General
The discount retailer spoke of consumer struggles on its recent earnings call. “Some of our customers have had to make sacrifices even for necessities.”
Jim Cramer, the famous investor, attributed some of the consumer slowdown due to geopolitical concerns and said: “I’m still not convinced that everything is falling apart.”
Plus, there are reasons to believe that DG’s resilience will be evident even if the US economic system does indeed slip into a recession by the second half of 2025.
Why? Why?
Dollar General’s stock has been on a steep decline since late 2022.
DG shares currently trade at a price that is about 70% below the high of the time.
This post How Dollar General Can Fight Back Against Walmart’s Market Dominance may be modified based on new developments.
This site is for entertainment only. Click here to read more
