Topic > The Financial Evolution of Dollar General Corporation

Because private brands may not achieve or maintain market acceptance, these brands may deliver the expected negative results. Financial condition and operating results may be adversely affected if pricing, quality and other factors do not meet customer satisfaction levels. With all brands sold by Dollar General there is the unfortunate shrinkage that can occur. Profitability may be adversely affected by inventory shrinkage and the inability to properly manage inventory balances. Effective inventory management is a key component of Dollar General's business success and profitability. If the company's purchasing decisions do not accurately predict consumer trends, excess inventory will negatively impact financial results. Inventory turnover has improved and the company is aware of and focused on addressing all these risks in the most productive way possible. The biggest risk the company faces from a consumer perspective is that its industry is highly competitive. Operating in a consumer staples market there is already pressure on margins and low prices are needed to remain competitive. This restriction on price increases can result in a loss when costs increase. The goal is to keep overhead, salaries, marketing and all costs to a bare minimum. Other competitors have saturated the geographic market where Dollar General once was located