The ratings on Dollar General Corp. reflect its solid position in the "extreme value" retail segment, a relatively consistent long-term track record of profitability, and strong cash flow protection measures. Mitigating factors include the company's participation in the highly competitive discount retail environment, current execution difficulties, and risks associated with its expansion program. Goodlettsville, Tenn.-based Dollar General is the oldest and largest player in the dollar-retailing segment, operating about 8,000 small-box stores across 30 states. Its merchandising strategy is to provide national brands at low prices for its core low-income customer. However, this customer is highly sensitive to factors like high gas prices and unemployment, which place greater strains on their spending than on higher-income customers. This has translated into
