Dollar General moves cautiously on price hikes

Retail Editor 3, June 1, 2011

Goodlettsville, Tenn. - Dollar General said that while retail prices are moving up in spots, it is sacrificing some margin to hold the line on EDLP for key items, mostly consumables.
During its first quarter conference call today, the 9,496-store retailer said first quarter margin was also impacted by clearance markdowns on winter home and apparel items.
"We expect another wave of cost increases," said Rick Dreiling, chairman and ceo. "We may need to raise prices as a result."
While the company missed Wall Street expectations, it recorded strong profit growth for the period ended April 29. Net income jumped 15% to $157 million, or 45 cents per share, compared to net income of $136 million, or 39 cents per share in last year's first quarter.
Sales of home products rose 4.2% to $243.2 million. Total company sales climbed 10.9% to $3.45 billion, with comps up 5.4% on top of a 6.7% same-store sales gain in the year-ago period.
"We saw the 13th consecutive quarter of increase in both traffic and ticket in comparable stores," said Dreiling.

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