Slower growth expectations amid intense competition in dollar store industry given rapid unit expansion among leading players in recent years; Macroeconomic headwinds for core customer including reduced government benefits, higher taxes, and continued elevated unemployment; and Margin erosion from increased sales of lower-margin consumables and tobacco products. Aggressive use of cash flow to fund share repurchases at accelerated pace in recent years; Increase in capital spending to support new store openings and food-related cooler installations; and Limited asset protection with company leasing most of its stores. The stable outlook on Dollar General Corp. reflects our view that the company will maintain its positive operating trends though at a more moderate pace in the coming year given industry market saturation. We
