Discount Stores Losing Momentum

摘要

The latest results from US discount operator Dollar General nconform to our strengthening view that the trend towards discount nstores in the US has peaked. The frm reported a 10.5% increase nin its full-year sales (ending January 28 2011), which came in at nUS$13.04bn. Same-store sales during the year climbed by 4.9% nbut slowed signifcantly in the fourth quarter, with growth of just n3.8%. This is in line with the results of fellow discount operator nFamily Dollar, which also posted a signifcant slowdown in the nfourth quarter of the year. Dollar General has attributed this drop in nmomentum to unfavourable weather conditions, but BMI believes nit can also be traced to an improvement in the underlying economic nenvironment and consumer confdence in the US.