Discount retailer Dollar General (DG) is one of the most popular destinations for low- priced consumer staples.
With the economy showing signs of fraying, consumers are seeking out value items and deals at a historic level.
At dollar stores like DG, customers can find everything from brand-name diapers, pharmacy items, party favors, and candy at discount.
It's no wonder that Dollar General is one of America's most popular retailers, with more than 18,700 stores in 47 states.
Dollar General Has Grown Quickly
Discounting can be good for the bottom line. As of 2019 the retailer was recognized as one of America's most profitable stores in rural areas. For the first 39 weeks of fiscal 2022, ended Oct. 28, the company's earnings per share rose 1.4% to $7.72 as net sales rose 8.1% to $27.64 billion.
In the fiscal 39 weeks, Dollar General saw its comparable sales grow by 3.8%, no small feat considering most brick and mortar retailers are lagging due to pinched wallets and generalized trending disinterest in the retail space.
Dollar General plans to open 1,050 stores in 2023 (it already has more than 19,000 stores within 5 miles of 75% of the U.S. population).
And an important caveat about the dollar-store industry: The proliferation of dollar stores has triggered a backlash from lower-income communities.
They argue that the fast growth of these stores has crowded out opportunities for supermarkets and other larger stores that can provide larger quantities of items for less money per unit.
They also have argued that the dollar stores focus too much on quick, and less healthy, food items and not enough on, for example, fresh produce. Some cities have passed legislation designed to restrict the growth of dollar stores.
Dollar General Faces a Pricing Dispute With Ohio
While Dollar General's bottom line is doing well, a specific point in its business is the subject of a dispute.
Ohio Attorney General Dave Yost is seeking a restraining order against the Goodlettsville, Tenn., company, alleging errors in Dollar General's pricing.
In a complaint filed in the Court of Common Pleas in Butler County, Yost claims that Dollar General is advertising its goods at one price but upcharging customers at the points of sale.
The Buckeye State's Department of Agriculture rules "permit stores to have up to a 2% error rate on overcharges," the AG's office says. But a statement from the attorney general says that DG's pricing discrepancy was as wide as 16.7% to as much as 88.2% at 20 store locations.
"Everything we buy these days costs more – Ohioans can ill-afford businesses that draw people in with the promise of low prices only to deceive them at the checkout counter," Yost said.
"This seems like a company trying to make an extra buck and hoping no one will notice. We’ve not only noticed but are taking action to stop it."
Dollar General didn't immediately respond to TheStreet's request for comment.
