Dollar General's profit rises 12% as shoppers still hunt discounts

Dollar General (NYSE:DG) reported a 12.3 percent rise in profit for the latest quarter as the discounter's low prices continue to attract more traffic.

Sales were up almost 8 percent to $5.1 billion, an increase attributed to additional store locations and a 2.8 percent sales increase at existing locations, Market Watch reported.

All categories experienced growth, with the largest increases in candy, snacks, tobacco, perishables and seasonal items.

Business has only increased for the discount store chain, even as the recession has come to an end. Although shoppers are feeling a slight ease on their monetary burdens, Dollar General continues to gain customers who are spending cautiously.

"It takes a little bit more time for her to let go of the purse strings a little bit more," Todd Vasos, Dollar General's new CEO, said in an earnings call, according to Market Watch.

Dollar General is currently using a new model for its company that involves spending more on employee wages, and reducing travel for district managers so they can spend more time with store managers. The new labor model will roll out to about one-third of the chain's 12,000 stores by the end of January.

Dollar General joins other retailers with a focus on improving employee wages and investing in stock levels, such as Walmart (NYSE:WMT) and Target (NYSE:TGT).

The discount chain's new strategy comes after competitors Dollar Tree (NASDAQ:DLTR) and Family Dollar Stores (NYSE:FDO) agreed to an $8.5 billion merger back in January.

For more:
-See this Market Watch article

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