What is up with Dollar General?

[Michigan CG]

Do these address your question?

Dollar General may be dropping Family Dollar pursuit

Family Dollar shareholders approve sale to Dollar Tree

I have read about those. With possible mergers they sure didn't slow down building.

 

[Howard Klahr]

How many Family Dollar Stores are there proximate to the newly constructed Dollar Stores?

 

[redfish]

Dollar General has changed its strategy towards market entry. Instead of a tried and true economic analysis and demographic study, DG has adopted the heroin and meth overdose per-capita market entry strategy.

 

[Michael S]

I've appraised several of these and all I can say is I sure wouldn't buy one at the current cap rates, especially those ones in small towns where it's literally about the only retail aside from a gas station/c-store. You could pay close to $1 million for a property with a 10-15 year lease that will be worth about $100,000 if they ever decide to not renew the lease. What demand is there for 8,000 SF of retail space in a town of 2,000 that's out in the middle of nowhere? Also, there's no barriers to entry in a lot of these places so if Dollar General builds a store, Family Dollar won't be too far behind, and vice versa.

 

[Stephen J. Vertin MAI]

I used a Dollar General land sale about a month ago that did not make much sense given the low traffic count so I spoke with someone in the real estate department who indicate they buy based on demographics. I suspected such since so many large retailers do the same but this sale was really off the grid. I am not sure what the demographic parameters are and I asked but she said she could not get into subject. I let it go. I would agree with many of the posters. What ever they are doing does not make much sense.

 

[Howard Klahr]

Dollar General Store Growth & Real Estate

 

[Stephen J. Vertin MAI]

Howard thanks for the link. I would believe it but what they are saying in the link and what they are actually doing are two separate things. In this case I believe the traffic count was about 8,000 vpd in a mostly residential area (and not one of the better residential ares at that). The average commercial-retail site in Chicagoland is about 15,000 to 20,000 vpd give-or-take and most retailers do not even consider the location good until it is +25,000. This is within traffic speeds of 25 to 35 mph. After 45 mph they believe they loose impulse buyers (that is unless there is high visibility within the appropriate distance). They claim they desire "Located along retail corridor with good traffic" but they paid top dollar for something much less. Go figure.
..

 

[Howard Klahr]

The benefits of financing thru the net lease market

 

[Michigan CG]

The latest one I discovered is in a rural area. It is located on a four-lane highway with speed limit of 55. There are four mobile home communities within a mile, two of them are not doing well (is any mobile home community doing well in Michigan?) Traffic count is about 15,000 per day.

The one built about a year ago is in a community of about 10,000 located close to a Kroger, in town speed limit is 35. I am going to guesstimate the traffic count at 10-15,000.

Third one is located close to a large amount of lower-middle income homes (3,000+). Speed limit is 45; traffic count about 10,000/day.

All three land sales surprised me.

 

[redfish]

Dollar General has changed its strategy towards market entry. Instead of a tried and true economic analysis and demographic study, DG has adopted the heroin and meth overdose per-capita market entry strategy.

The latest one I discovered is in a rural area. It is located on a four-lane highway with speed limit of 55. There are four mobile home communities within a mile, two of them are not doing well (is any mobile home community doing well in Michigan?) Traffic count is about 15,000 per day.

The one built about a year ago is in a community of about 10,000 located close to a Kroger, in town speed limit is 35. I am going to guesstimate the traffic count at 10-15,000.

Third one is located close to a large amount of lower-middle income homes (3,000+). Speed limit is 45; traffic count about 10,000/day.

All three land sales surprised me.

Maybe DG is planning to partner with a national pay day loan outfit and offer dollar goods and high interest short term loans under one roof.