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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 30, 2004

Commission file number: 001-11421

DOLLAR GENERAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark whether the Registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [X ] No [   ]

The aggregate market value of the voting stock held by non-affiliates of the Registrant, computed by reference to the closing price on the New York Stock Exchange as of August 1, 2003, is approximately $5.54 billion. The Registrant has no non-voting common stock.  For purposes of this disclosure only, the Registrant has assumed that its directors, executive officers and beneficial owners of greater than 10% of the Registrant’s common stock are the “affiliates” of the Registrant.  

The number of shares of common stock outstanding on February 27, 2004, was 336,467,300.

Documents Incorporated by Reference

The information required in Part III of this Form 10-K is incorporated by reference to the Registrant’s definitive proxy statement to be filed for the Annual Meeting of Shareholders to be held on May 25, 2004.

The following text contains references to years 2004, 2003, 2002, 2001, 2000, and 1999, which represent fiscal years ending or ended January 28, 2005, January 30, 2004, January 31, 2003, February 1, 2002, February 2, 2001 and January 28, 2000, respectively.  This discussion and analysis should be read with, and is qualified in its entirety by, the consolidated financial statements and the notes thereto.

PART I

ITEM 1.

BUSINESS

General

Dollar General Corporation (the “Company” or “Dollar General”) is a leading discount retailer of quality general merchandise at everyday low prices.  Through conveniently located stores, the Company offers a focused assortment of consumable basic merchandise including health and beauty aids, packaged food products, home cleaning supplies, housewares, stationery, seasonal goods, basic clothing and domestics.  Dollar General stores serve primarily low-, middle- and fixed-income families.  

The Company was founded in 1939 as J.L. Turner and Son, Wholesale.  The Company opened its first dollar store in 1955, when the Company was first incorporated as a Kentucky corporation under the name J.L. Turner & Son, Inc.  The Company changed its name to Dollar General Corporation in 1968 and reincorporated as a Tennessee corporation in 1998.  As of February 27, 2004, the Company operated 6,817 stores in 29 states, primarily in the southern, eastern and midwestern United States.

Overall Business Strategy

Dollar General’s mission statement is “Serving Others.” To carry out this mission, the Company has developed a business strategy of providing its customers with a focused assortment of fairly priced, consumable basic merchandise in a convenient, small-store format.

Our Customers.  The Company serves the consumable basics needs of customers primarily in the low- and middle-income brackets and those on fixed incomes.  Research performed by an outside service on behalf of the Company in 2001 indicated that approximately 55% of its customers lived in households earning less than $30,000 a year, and approximately 36% earned less than $20,000.  The Company has not engaged an outside service to update this research since 2001; however, according to AC Nielsen’s 2003 Homescan® data, in 2003 approximately 48% of the Company’s customers lived in households earning less than $30,000 a year and approximately 26% earned less than $20,000.  The Company’s merchandising and operating strategies are designed to meet the need for consumable basics of the consumers in these groups.

Our Stores.  The average Dollar General store has approximately 6,800 square feet of selling space and serves customers who live within five miles of the store.  As of February 27, 2004, the Company had more than 4,200 stores serving communities with populations of 20,000 or less.  The Company believes that its target customers prefer the convenience of a small, neighborhood store.  As the discount store industry continues to move toward larger, “super-center” type stores, which are often built outside of towns, the Company believes that Dollar General’s convenient discount store format will continue to attract customers and provide the Company with a competitive advantage.  In 2003, the Company opened two Dollar General Market stores which have approximately 16,000 square feet of selling space and which carry, among other things, an expanded assortment of grocery products and perishable items.  The Company expects to continue to test and refine this concept and plans to open 20 Dollar General Market stores in 2004.  

Our Merchandise.  The Company is committed to offering a focused assortment of quality, consumable basic merchandise in a number of core categories, such as health and beauty aids, packaged food products, home cleaning supplies, housewares, stationery, seasonal goods, basic clothing and domestics.  Because the Company offers a focused assortment of consumable basic merchandise, customers are able to shop at Dollar General stores for their everyday household needs.  In 2003, the average customer purchase was $8.56.

Our Prices.  The Company distributes quality, consumable basic merchandise at everyday low prices. Its strategy of a low-cost operating structure and a focused assortment of merchandise allows the Company to offer quality merchandise at highly competitive prices.  As part of this strategy, the Company emphasizes even-dollar price points.  In the typical Dollar General store, the majority of the products are priced at $10 or less, with approximately 33% of the products priced at $1 or less.  

Our Cost Controls.  The Company emphasizes aggressive management of its overhead cost structure. Additionally, the Company seeks to locate stores in neighborhoods where rental and operating costs are relatively low. The Company attempts to control operating costs by implementing new technology where feasible. Examples of this strategy in 2003 and 2002 include improvements to the Company’s supply chain and warehousing systems, the introduction of loss prevention software designed to identify unusual cash register transactions and the implementation of a new merchandise planning system designed to assist its merchants with their purchasing and store allocation decisions.

Growth Strategy

The Company has experienced a rapid rate of expansion in recent years, increasing its number of stores from 3,687 as of January 29, 1999, to 6,817 as of February 27, 2004.  In addition to growth from new store openings, the Company recorded same-store sales increases of 4.0% and 5.7% in 2003 and 2002, respectively.  Same-store sales increases are calculated based on the comparable calendar weeks in the prior year.  Same-store sales calculations for a given period include only those stores that were open both at the end of that period and at the beginning of the preceding fiscal year. Management will continue to seek to grow the Company’s business.  The Company believes this growth will come from a combination of new store openings, infrastructure investments and merchandising initiatives.

New Store Growth.  Management believes that the Company’s convenient, small-store format is adaptable to small towns and neighborhoods throughout the country.  The majority of the Company’s stores are located in these small towns (defined by the Company as communities with populations of 20,000 or less).  In 2003, approximately 50% of the Company’s new stores were opened in small towns while the other 50% were opened in more densely populated areas.  The Company expects a similar mix of new store openings between small towns and more densely populated areas in 2004.  New store openings in 2004 will include the Company’s existing market area as well as three additional states identified below where management believes the Company has the potential to expand its store base. Opening stores in its existing market area allo ws the Company to take advantage of brand awareness and to maximize its operating efficiencies.

 In 2004, the Company will expand its operating area to include Wisconsin, Arizona and New Mexico, which management believes are competitively underserved and offer the potential for additional growth for the Company.  The Company did not expand to additional states in 2003 and 2002.  In 2001, the Company opened stores in two additional states, New York and New Jersey.  As of February 27, 2004, the Company had 160 stores in New York and 24 stores in New Jersey. The Company expects to continue to explore the potential for expansion into additional geographic markets as opportunities present themselves.  

In 2003, 2002 and 2001, the Company opened 673, 622, and 602 new stores, and remodeled or relocated 76, 73 and 78 stores, respectively.  The Company currently expects to open approximately 675 new Dollar General stores and 20 new Dollar General Market stores and close 60 to 80 stores in 2004.

Infrastructure Investments. In recent years, the Company has made significant investments in its distribution network and management information systems.  In August 2000, the Company opened a 1.0 million square-foot distribution center (“DC”) in Alachua, Florida, and in April 2001, the Company opened a 1.2 million square-foot DC in Zanesville, Ohio. These significant investments in the Company’s distribution network were the result of the Company’s strategy to reduce transportation expenses and effectively support the Company’s growth.  In November 2003 and January 2004, the Company announced its plans to expand its DCs in South Boston, Virginia and Ardmore, Oklahoma, respectively. In addition, both of these DCs are being converted from single to dual sortation systems which will give them the ability to serve more stores.   ;In addition, the Company has selected Union County, South Carolina, as the site of its eighth DC, which is expected to be fully operational in mid-2005.  As of February 27, 2004, each of the Company’s seven existing DCs, on average, serviced approximately 974 stores with an average distance per delivery of approximately 225 miles.

Recent investments in technology are listed below. In 2003, these included an improved warehouse management system, a DC appointment scheduling system, an inventory reconciliation system, allocation system improvements, credit/debit and/or electronic benefit transfer (“EBT”) capabilities, shortage analysis reporting, and improvements to automated DC replenishment systems. Certain of these 2003 projects are still in the implementation phase. Technology initiatives in 2002 included the establishment of perpetual inventories in all stores, a new order processing system, new loss prevention software, systems for a new import deconsolidation function, the establishment of a business-to-business website for supply chain efficiencies, and systems to enable automated store replenishment. During the 2001-2002 time frame, the Company implemented a new merchandise planni ng system designed to assist its merchants with their purchasing and store allocation decisions, satellite technology that improves communications between the stores and the corporate office and provides faster check authorization for the Company’s customers, and new IBM registers that capture sales, inventory and payroll data.

Merchandising Initiatives.  The Company’s merchandising initiatives are designed to promote same-store sales increases.  In recent years, the Company has increased its emphasis on the highly consumable category by adding items in the food, paper, household chemicals, and health and beauty aids categories. In 2001, the Company began offering perishable products.  This perishable program, which includes a selection of dairy products, luncheon meats, frozen foods and ice cream, was expanded from 411 stores at the end of 2001 to 1,367 stores at the end of 2002 and 2,445 stores at the end of 2003.  The Company will continue to evaluate the performance of its merchandise mix and make adjustments where appropriate.

Prior to 2000, the Company’s strategy was generally to avoid marking items down from its everyday low retail price with the exception of damaged product which was typically marked down to zero and disposed of.  In 2000, and in subsequent years, in addition to continuing its practice of marking down damaged product, the Company also selectively marked down slower moving and discontinued items.  In the fourth quarter of 2003, and principally at the conclusion of the Christmas selling season, the Company took end of season markdowns materially in excess of what it has taken in prior years to help sell through Christmas-related items that had not sold in sufficient quantities.  In the past, the Company would have carried that inventory forward and would have attempted to adjust future inventory purchases to account for the carryover product.  In 200 4 and beyond, the Company intends to continue this practice of emphasizing the in-season sale of seasonal merchandise by taking progressive, end-of-season markdowns.  This will be a year-round strategy that will not be limited to the Christmas selling season.  Management expects to establish the appropriate size of such markdowns by means of an ongoing cost benefit analysis that considers factors such as the potential corresponding increase in sales and a potential reduction in shrink and inventory handling and carrying costs.  

Merchandise

Dollar General stores offer a focused assortment of quality, consumable basic merchandise in a number of core categories. The Company separates its merchandise into the following four categories for internal reporting purposes: highly consumable, seasonal, home products, and basic clothing.

The percentage of total sales of each of the four categories tracked by the Company for the preceding three years is as follows:

Of the four categories, the seasonal category typically records the highest gross profit rate and the highly consumable category typically records the lowest gross profit rate.  

The Company purchases its merchandise from a wide variety of suppliers. Approximately 11% of the Company’s purchases in 2003 were made from Procter and Gamble.  No other supplier accounted for more than 4% of the Company’s purchases in 2003.  Approximately 15% of the Company’s retail receipts in 2003 were directly imported by the Company.

The Company generally does not run weekly advertising circulars but does advertise to support new store openings primarily with targeted circulars promoting those openings and in-store signage.  Advertising expenses are less than 1% of sales.

The Company maintains approximately 4,250 core stock-keeping units (“SKUs”) per store. The Company’s average customer purchase in 2003 was $8.56. The average number of items in each customer purchase was 5.8, and the average price of each purchased item was $1.49.

The Company’s business is modestly seasonal in nature.  The only extended seasonal increase in business that the Company experiences occurs during the Christmas selling season.  During the Christmas selling season, the Company carries merchandise that it does not carry during the rest of the year, such as gift sets, trim-a-tree, certain baking items, and a broader assortment of toys and candy.  In 2003, 2002 and 2001, the fourth quarter generated 29%, 29% and 30% of the Company’s total annual revenues, respectively.  

The Dollar General Store

The typical Dollar General store is operated by a manager, an assistant manager and two or more sales clerks.  Approximately 56% of the Company’s stores are located in strip shopping centers, 41% are in freestanding buildings and 3% are in downtown buildings.  The Company generally has not encountered difficulty locating suitable store sites in the past, and management does not currently anticipate experiencing material difficulty in finding suitable locations at favorable rents.

The Company’s recent store growth is summarized in the following table:

Employees

As of February 27, 2004, the Company employed approximately 57,800 full-time and part-time employees, including divisional and regional managers, district managers, store managers, and DC and administrative personnel, compared with approximately 53,500 employees on February 28, 2003.  Management believes the Company’s relationship with its employees is generally good.

Competition

The Company is engaged in a highly competitive business with respect to price, store location, merchandise quality, assortment and presentation, in-stock consistency, and customer service.  The Company competes with discount stores and with many other retailers, including mass merchandise, grocery, drug, convenience, variety and other specialty stores.  Some of the nation’s largest retail companies operate stores in areas where the Company operates.  The Company’s direct competitors in the dollar store retail category include Family Dollar, Dollar Tree, Fred’s and various local, independent operators.  Competitors from other retail categories include CVS, Rite Aid, Walgreens, Eckerd, Wal-Mart and Kmart.  Some of the Company’s competitors from outside the dollar store segment are better capitalized than the Company.

The dollar store category differentiates itself from other forms of retailing by offering consistently low prices in a convenient, small-store format.  The Company’s prices are competitive because of its low cost operating structure and the relatively limited assortment of products offered.  Labor and marketing expenses are minimized by the limited use of circulars, fewer price points and relying on simple merchandise presentation.  The Company attempts to locate primarily in second tier locations, either in small towns or in the neighborhoods of more densely populated areas where occupancy expenses are relatively low.  The Company believes that its limited assortment of products allows it to focus its purchasing efforts on fewer SKUs than other retailers, which helps keep its cost of goods relatively low.

Trademarks

The Company, through its affiliate, Dollar General Intellectual Property, L.P., has registered the trademarks Dollar General®, Clover Valley®, DG Guarantee® and the Dollar General price point designs, along with certain other trademarks, with the United States Patent and Trademark Office.  The Company attempts to obtain registration of its trademarks whenever possible and to pursue vigorously any infringement of those marks.

Available Information

The Company’s website address is www.dollargeneral.com.  The Company makes available through this address, without charge, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after they are electronically filed or furnished to the SEC.

ITEM 2.

PROPERTIES

As of February 27, 2004, the Company operated 6,817 retail stores located in 29 states as follows:

Most of the Company’s stores are located in leased premises.  Individual store leases vary as to their terms, rental provisions and expiration dates.  In 2003, the Company’s aggregate store rental expense averaged $5.41 per square foot of selling space.  The majority of the Company’s leases are low-cost, short-term leases (usually with initial or primary terms of three to five years) with multiple renewal options when available.  The Company also has stores subject to build-to-suit arrangements with landlords, which typically carry a primary lease term of between 7 and 10 years. In 2004, the Company expects approximately 350 to 450 of its new stores to be subject to build-to-suit arrangements.

As of February 27, 2004, the Company had seven DCs serving Dollar General stores, as described in the following table:

The Company owns the DCs located in Kentucky, Florida, and Ohio and leases the other four DCs.  The Company’s executive offices are located in approximately 302,000 square feet of owned space in Goodlettsville, Tennessee.  In a move to further enhance the Company’s distribution network, the Company has selected Union County, South Carolina, as the site of its eighth DC.  The Company plans to build a 1.1 million square-foot facility on a 177-acre site, pending final documentation and all required governmental approvals.  Located approximately 15 miles south of Spartanburg, the facility is expected to employ more than 600 people when it reaches full capacity.  The Company anticipates the facility to be fully operational in mid-2005.

ITEM 3.

LEGAL PROCEEDINGS

Restatement-Related Proceedings

As previously disclosed in the Company’s periodic reports filed with the Securities and Exchange Commission (the “SEC”), the Company restated its audited financial statements for fiscal years 1999 and 1998, and certain unaudited financial information for fiscal year 2000, by means of its Form 10-K for the fiscal year ended February 2, 2001, which was filed on January 14, 2002.

The SEC has been conducting an investigation into the circumstances giving rise to the restatement and, on January 8, 2004, the Company received notice that the SEC staff was considering recommending that the SEC bring a civil injunctive action against the Company for alleged violations of the federal securities laws in connection with circumstances relating to the restatement.  The Company subsequently has reached an agreement in principle with the SEC staff to settle the matter.  Under the terms of the agreement in principle, the Company will consent, without admitting or denying the allegations in a complaint to be filed by the SEC, to the entry of a permanent civil injunction against future violations of the antifraud, books and records, reporting and internal control provisions of the federal securities laws and related SEC rules and will pay a $10 millio n non-deductible civil penalty.  The Company is not entitled to seek reimbursement from its insurers with regard to this settlement.

The agreement with the SEC staff is subject to final approval by the SEC and the court in which the SEC’s complaint is filed. The Company has accrued $10 million with respect to the penalty in its financial statements for the year ended January 30, 2004.  The Company can give no assurances that the SEC or the court will approve this agreement.  If the agreement is not approved, the Company could be subject to different or additional penalties, both monetary, and non-monetary, which could adversely affect the Company’s financial statements as a whole.  

In addition, as previously discussed in the Company’s periodic reports filed with the SEC, the Company settled in the second quarter of 2002 the lead shareholder derivative action relating to the restatement that had been filed in Tennessee State Court.  All other pending state and federal derivative cases were subsequently dismissed during the third quarter of fiscal 2002. The settlement of the shareholder derivative lawsuits resulted in a net payment to the Company, after attorney’s fees payable to the plaintiffs’ counsel, of approximately $25.2 million, which was recorded as income during 2002. The Company also settled the federal consolidated restatement-related class action lawsuit in the second quarter of fiscal 2002. The $162 million settlement, which was expensed in the fourth quarter of 2000, was paid in the first half of fiscal 2002. The Co mpany received from its insurers $4.5 million in respect of such settlement in 2002, which was recorded as income.

Plaintiffs representing fewer than 1% of the shares traded during the class period chose to opt out of the federal class action settlement. One such plaintiff chose to pursue recovery against the Company individually.  In 2002, the Company settled and paid that claim and recognized an expense of $0.2 million in respect of that agreement.

Other Litigation

On March 14, 2002, a complaint was filed in the United States District Court for the Northern District of Alabama to commence a collective action against the Company on behalf of current and former salaried store managers.  The complaint alleges that these individuals were entitled to overtime pay and should not have been classified as exempt employees under the Fair Labor Standards Act (“FLSA”).  Plaintiffs seek to recover overtime pay, liquidated damages, declaratory relief and attorneys’ fees.  

In the third quarter of 2003, the court denied the plaintiff’s motion to allow the action to proceed as a nationwide collective action, but determined that the action could proceed collectively as to a region that was not then defined.  However, on January 12, 2004, the court certified an opt-in class of plaintiffs consisting of all persons employed by the Company as store managers at any time since March 14, 1999, who regularly worked more than 50 hours per week and either: (1) customarily supervised less than two employees at one time; (2) lacked authority to hire or discharge employees without supervisor approval; or (3) sometimes worked in non-managerial positions at stores other than the one he or she managed. The Company’s attempt to appeal this decision on a discretionary basis to the 11^th Circuit Court of Appeals has been denied.  

This action is still in the discovery phase.  The Company believes that its store managers are and have been properly classified as exempt employees under the FLSA and that the action is not appropriate for collective action treatment.  The Company intends to vigorously defend the action.  However, no assurances can be given that the Company will be successful in defending this action on the merits or otherwise, and, if not, the resolution could have a material adverse effect on the Company’s financial statements as a whole.

The Company is involved in other legal actions and claims arising in the ordinary course of business.  The Company currently believes that such litigation and claims, both individually and in the aggregate, will be resolved without a material effect on the Company’s financial statements as a whole.  However, litigation involves an element of uncertainty.  Future developments could cause these actions or claims to have a material adverse effect on the Company’s financial statements as a whole.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to shareholders during the fourth quarter of 2003.

ITEM 4A.

EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding the executive officers of the Company is set forth below. The Company’s executive officers serve at the pleasure of the Board of Directors and are elected annually by the Board to serve until their successors are duly elected.

Mr. Perdue joined Dollar General on April 2, 2003 as Chief Executive Officer and as a member of the Board of Directors. He was elected Chairman on June 2, 2003. Prior to joining Dollar General, Mr. Perdue served as Chairman and Chief Executive Officer of Pillowtex Corporation, a leading producer and marketer of home textiles, from July 2002 through March 27, 2003. Pillowtex filed for bankruptcy in July 2003. Mr. Perdue also served as Executive Vice President (January 2001 to July 2002) and Senior Vice President, Global Supply Chain (September 1998 to October 1999) of Reebok International Ltd., as well as President and Chief Executive Officer (January 2001 to July 2002) and Executive Vice President, Global Operating Units (October 1999 to January 2001) of the Reebok Brand. From 1994 to September 1998, Mr. Perdue was Senior Vice President of Haggar, Inc., where he was responsible for all aspects of operations from planning through distribution. From 1992 until 1994, he was based in Hong Kong as Senior Vice President of Operations for Sara Lee Corp. Mr. Perdue also has served as a director of Alliant Energy Corporation since 2001.

Mr. Jackson joined Dollar General in September 2003 as President and Chief Operating Officer. From 1997 until joining Dollar General, Mr. Jackson was Senior Vice President of Supply Operations for Safeway Inc., a food and drug retailer. Prior to his nearly 6 years with Safeway, Mr. Jackson spent 17 years with PepsiCo, Inc. There, he held various positions from 1981 through 1994 at Pepsi-Cola Company, a subsidiary of PepsiCo., Inc., including Plant Manager, Director of Planning, Vice President of Operations, Vice President of On-Premises Sales, and Vice President/General Manager. In addition, from December 1994 to October 1997, he was Chief Operating Officer and Senior Vice President of Worldwide Operations for PepsiCo Food Systems, Inc., a distributor of restaurant equipment and supplies. Mr. Jackson currently serves on the boards of directors for Parsons Corporation, Allied Wast e Industries, Inc., and Radio Shack Corporation.

Mr. Hagan joined Dollar General as Executive Vice President and Chief Financial Officer in March 2001.  From June 2000 through March 2001, he served as Chief Financial Officer of Central Parking Corporation, a provider of parking and transportation management services.  From April 1999 through June 2000, Mr. Hagan served as Executive Vice President and Chief Financial Officer of Saturn Retail Enterprises, an owner/operator of Saturn automobile dealerships and a wholly owned indirect subsidiary of General Motors Corporation.  From May 1996 through April 1999, he served as Executive Vice President and Chief Financial Officer of Bruno’s Inc., a supermarket operator. Mr. Hagan also previously served as Executive Vice President and Chief Financial Officer of Revco D.S., Inc.

Ms. Guion joined Dollar General in October 2003 as Executive Vice President, Store Operations. From April 2000 until joining Dollar General, Ms. Guion served as President and Chief Executive Officer of Duke and Long Distributing Company, a convenience store chain operator and wholesale distributor of petroleum products that filed for bankruptcy in November 2000. Prior to that time, she served as an operating partner for Devon Partners (1999-2000), where she developed operating plans and assisted in the identification of acquisition targets in the convenience store industry, and as President and Chief Operating Officer of E-Z Serve Corporation (1997-1998), an owner/operator of convenience stores, mini-marts and gas marts. From 1987 to 1997, Ms. Guion served as the Vice President and General Manager of the largest division (Chesapeake Division) of company-owned stores at 7-Eleven, Inc., a convenience store chain. Other positions held by Ms. Guion during her tenure at 7-Eleven include District Manager, Zone Manager, Operations Manager, and Division Manager (Midwest Division).

Mr. Hartshorn joined Dollar General as Vice President, Operations in 1992 and became Vice President, Merchandising Operations in 1993.  He was named Senior Vice President, Logistics and Merchandising Operations in February 2000 and then Executive Vice President, Merchandising in February 2001. He assumed his current position as Executive Vice President, New Business Development in August 2003. Before joining Dollar General, Mr. Hartshorn was Director of Store Operations for McCrory/TG&Y, a retailing company. Mr. Hartshorn joined TG&Y in 1968 and held various operations management positions, including Corporate Directors of Store Operations, Expense and Budget Control; Territorial Director of Store Operations; District Manager; and Store Manager.

Mr. O’Briant joined Dollar General in 1991 as Divisional Merchandise Manager.  Mr. O’Briant was named General Merchandise Manager in 1992, Vice President, Merchandising in 1995, Senior Vice President, Merchandising and MIS in 1998, Executive Vice President in 2000, and Executive Vice President, Operations in February 2001. He assumed his current position as Executive Vice President, Merchandising, Marketing and Strategic Planning in August 2003. Before joining Dollar General, Mr. O’Briant spent 17 years with Fred’s, Inc., a discount retailer, where he served in a number of executive management positions, including Vice President, Hardlines, Vice President, Softlines, and Vice President, Household Goods. He also owned his own business, O’Briant Enterprises, Inc. from 1989 to 1991, specializing in the service sector serving retail and wholesale custome rs and the military.

Ms. Lanigan joined Dollar General in July 2002 as Vice President, General Counsel and Corporate Secretary. She was promoted to Senior Vice President in October 2003. Prior to joining Dollar General, Ms. Lanigan served as Senior Vice President, General Counsel and Secretary at Zale Corporation, a specialty retailer of fine jewelry, headquartered in Irving, Texas. During her six years with Zale, Ms. Lanigan held various positions, including Associate General Counsel. Prior to that, she held legal positions with both Turner Broadcasting System, Inc. and Troutman Sanders law firm.

Mr. Lewis joined Dollar General as Vice President and Controller in October 2001.  From May 1999 through September 2001, Mr. Lewis served as Group Vice President, overseeing operational, planning and administrative functions for Lux Corp., an apparel retailer doing business as “Mr. Rags” and a then wholly-owned subsidiary of Claire’s Stores, Inc. Mr. Lewis served as Vice President of Finance from February 1996 until May 1999, and as Controller from November 1988 until May 1999, for Claire’s Stores, Inc., an international retailer of value-priced costume jewelry and accessories. Prior to joining Claire’s Stores, Mr. Lewis was employed with Arthur Andersen & Co.

Mr. Rice joined Dollar General in June 1981 as a part-time summer employee in the Scottsville, Kentucky DC.  In May 1984, he began working full-time as the first writer and editor of Dollar General’s employee newsletter. Upon graduation from college, Mr. Rice served as assistant to the Vice President of Human Resources for one year. Over the next nine years, Mr. Rice served in various positions in human resources at Dollar General, including Corporate Recruiter, Scottsville DC and Office HR Manager, and Corporate Personnel Manager, before being promoted to Director of Human Resources in 1996. Mr. Rice was promoted to Senior Director, Human Resources in 1999 and then to his current position in September 2002.

PART II

ITEM 5.

MARKET FOR THE REGISTRANT’S COMMON STOCK

AND RELATED SECURITY HOLDER MATTERS

The Company’s common stock is traded on the New York Stock Exchange under the symbol “DG.”  The following table sets forth the range of the high and low sales prices of the Company’s common stock during each quarter in 2003 and 2002, as reported on the New York Stock Exchange, together with dividends.  

The Company’s stock price at the close of the market on February 27, 2004, was $21.89.

There were approximately 12,777 shareholders of record of the Company’s common stock as of February 27, 2004. The Company has paid cash dividends on its common stock since 1975.  The Board of Directors regularly reviews the Company’s dividend plans to ensure that they are consistent with the Company’s earnings performance, financial condition, need for capital and other relevant factors.  Consistent with that review, on March 12, 2004, the Board of Directors authorized a dividend of $0.04 per share for the first quarter of 2004.

The following table sets forth information with respect to purchases of shares of the Company’s common stock made during the quarter ended January 30, 2004 by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Securities Exchange Act of 1934:

(a)  On March 13, 2003, the Company announced that its Board of Directors had authorized the Company to repurchase up to 12 million shares of the Company’s outstanding common stock. Purchases may be made in the open market or in privately negotiated transactions from time to time subject to market conditions. This repurchase authorization expires on March 13, 2005.

 ITEM 6.

SELECTED FINANCIAL DATA

(In thousands except per share and operating data)