This is an odd news item, but it might represent something of a growing phenomenon. Spotted on the news page of a radio station in Texas, of all places, reports suggest that discount retail giant Dollar General (DG) may be considering an Amazon (AMZN)-style approach to stores with no employees. There is little corroboration on this as yet, but if this holds true, Dollar General may be taking retail in a strange and largely untried new direction. Investors seemed happy enough, though, and shares gained nearly 2.5% in Wednesday morning’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The report noted that customers would need to scan their credit or debit card before even walking into the store to begin with. Once that scan was complete, shoppers could simply grab the items in question, and then walk out, with the total automatically charged to the debit or credit card used to enter the store in the first place. A set of video cameras would watch, relentlessly, to ensure proper charging.
If this sounds familiar, Amazon did something similar with its Amazon Go stores as far back as 2020. But subsequent reports noted that Amazon ultimately ditched the Just Walk Out technology that ran these stores in many places. So this report might be a little far-fetched, but if Dollar General has found a way to succeed where Amazon has failed, this could be a major development in the making.
Analyst Improvement
While Dollar General may be about to change retail in a fashion even Amazon could not quite pull off, there are signs that the stock in general is improving. Evercore ISI analysts recently added Dollar General to the “Outperform Tactical and Action Positioning Call List.” This list, for those not familiar, is a selection of stocks that are likely to outperform the market in the short term thanks to some key factors about their operation.
Those factors include the first quarter earnings release as well as a likely update on guidance going forward. With larger economic issues also working in Dollar General’s favor, like word of softening tariff talks and a “tariff truce” that may continue from here, the end result should help secure Dollar General’s position as a good play in discount retail.
Is Dollar General Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DG stock based on nine Buys and 13 Holds assigned in the past three months, as indicated by the graphic below. After a 26.12% rally in its share price over the past year, the average DG price target of $123.95 per share implies 17.37% upside from current levels.
