Dollar General Tumbles as Discounting Push Squeezes Margins
- Promotions and higher costs ate into company’s profitability
- Investors look past better-than-expected overall earnings
A Dollar General store in Scottsville, Kentucky.
Photographer: Luke Sharrett/BloombergThis article is for subscribers only.
Dollar General Corp. is feeling the pressure as grocery competition heats up.
Shares of the dollar-store chain fell the most in more than two months after it reported a tighter gross margin in the second quarter. Deeper discounts and steeper pay for managers contributed to the profit squeeze. The company also is grappling with rising occupancy costs and a higher proportion of its sales going to less profitable consumable goods.