Dollar General Corp (NYSE: DG) has not been particularly exciting for investors since the start of this year, much of which is related to the broader concerns that it’s losing share to the likes of Walmart Inc (NYSE: WMT).
Walmart has been laser focused on catering to the lower and middle-income household over the past few quarters, with recent reports indicating that its strategy has started to pay off as well.
But there’s something that Dollar General could do to essentially shield itself from WMT stealing its share, according to famed investor Jim Cramer.
The answer lies in being smart at picking real estate, he argued in a recent CNBC appearance.
How can Dollar General protect its market share?
Dollar General continues to be a renowned chain of discount stores in the US.
It’s still a priority store for people in search of a bargain.
While the focus more broadly has been on it losing share to Walmart, what’s going unnoticed is that it does better in locations where there’s no Walmart nearby, according to the Mad Money host.
DG already has plans of continuing with its accelerated pace of opening new stores in 2025.
All it has to do is choose the real estate well, viz-à-viz open a store that’s not particularly close to a Walmart, he added on “Mad Dash”.
DG reported solid sales for its fourth quarter
Jim Cramer remains bullish on Dollar General stock also because the discount retailer reported strong sales for its Q4 and issued upbeat long-term guidance this week.
DG expects its per-share earnings to grow by more than 10% starting in 2026.
Street had called for a lower 8.75% increase instead.
Additionally, the retail firm plans on remodeling thousands of its stores and closing nearly 100 of its underperforming namesake locations to prepare for a potential recession ahead.
A 2.95% dividend yield makes Dollar General stock all the more exciting to own at current levels.
What a consumer slowdown may mean for Dollar General
On its recent earnings call, the discount retailer talked of consumer struggles, adding “some of our customers report they’ve had to sacrifice even on necessities.”
Still, famed investor Jim Cramer attributed much of the consumer slowdown to geopolitical fears and said “I’m not totally convinced everything is falling apart.”
Plus, there’s reason to believe that DG will show resilience even if the US economy does indeed slide into a recession in the back half of 2025.
Why? Because it’s a retail chain known for bargains – it offers great value to consumers and helps them navigate challenging times that tend to hurt their financial capabilities.
Nonetheless, Dollar General stock has been in a sharp downtrend since late 2022.
DG shares are currently trading about 70% below their high at the time.
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