Dollar General Reports Increased Sales and Earnings for the 39-Week Period

GOODLETTSVILLE, Tennessee - January 14, 2002 - Dollar General Corporation (NYSE: DG) today reported that net income for the 39-week period ended November 2, 2001, increased 7.1 percent to $110.1 million, or $0.33 per diluted share, compared with $102.8 million, or $0.31 per diluted share, for the 39-week period ended October 27, 2000.

"Despite the demands of the restatement process, our results year-to-date reflect our employees' dedication to serving our customers and operating our stores well. Our 39-week period same-store sales increase of 7.6 percent is a result of better in-stocks of consumable basic merchandise, more effective merchandise flow and a better presentation of seasonal merchandise resulting from last year's store layout changes," said Cal Turner, Chairman and CEO. "In addition to generating strong sales increases, this year we have:

Our strategy is right; our niche is compelling, especially in the current economic environment; and our employees are more excited than ever about our prospects."

Total sales for the 39-weeks ended November 2, 2001, increased 20.2 percent to $3.74 billion from $3.11 billion for the 39-week period ended October 27, 2000. For the 39-week calendar period ended November 2, 2001, same-store sales increased 7.6 percent. As of November 2, 2001, the Company had opened 523 new stores and closed 38 stores.

Gross profit increased 18.6 percent to $1.03 billion, or 27.7 percent of sales, compared with $0.87 billion, or 28.0 percent of sales, in the prior year. The reduction in gross margin was due in part to the continued shift in the Company's sales to lower margin consumable basic items.

Selling, General and Administrative Expenses ("SG&A") were $823.2 million, or 22.0 percent of sales, versus $672.3 million, or 21.6 percent of sales, during the comparable period in the prior year, an increase of 22.4 percent. The Company recorded $18.3 million in expenses, primarily professional fees, in the current year period related to the restatement of certain previously released financial data. Excluding the restatement related expenses, SG&A would have been $804.9 million, or 21.5 percent of sales, an increase of 19.7 percent over the prior year.

Interest expense decreased 1.4 percent to $35.0 million, or 1.0 percent of sales, compared with $35.5 million, or 1.1 percent of sales, in the prior year.

The Company's effective tax rate was 37.4 percent in the current year period and 37.3 percent in the prior year period.

Net income, including restatement-related expenses, increased 7.1 percent to $110.1 million, or $0.33 per diluted share compared with $102.8 million, or $0.31 per diluted share during the comparable period in the prior year. Excluding restatement-related expenses, net income for the 39-week period ended November 2, 2001, increased 18.2 percent to $121.5 million, or $0.36 per diluted share.

LIFO merchandise inventories increased 12.7 percent to $1.25 billion at November 2, 2001, from $1.11 billion at October 28, 2000.

Dollar General currently operates approximately 5,550 neighborhood stores in 27 states with distribution centers in Florida, Kentucky, Mississippi, Missouri, Ohio, Oklahoma and Virginia.

This press release contains historical and forward-looking information. The words "believe," "anticipate," "project," "plan," "expect," "estimate," "objective," "forecast," "goal," "intend," "will likely result," or " will continue" and similar expressions identify forward looking statements. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company believes the assumptions underlying these forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in the forward-looking statements. The factors that may result in actual results differing from such forward-looking information include, but are not limited to: the Company's ability to maintain adequate liquidity through its cash resources and credit facilities, including its ability to refinance or replace such facilities on favorable terms at the maturity thereof; the Company's ability to comply with the terms of the Company's credit facilities (or obtain waivers for non-compliance); general transportation and distribution delays or interruptions; inventory risks due to shifts in market demand; changes in product mix; interruptions in suppliers' businesses; fuel price and interest rate fluctuations; a deterioration in general economic conditions caused by acts of war or terrorism; temporary changes in demand due to weather patterns; delays associated with building, opening and operating new stores; the results of the Company's restatement and audit process; and the impact of the litigation and regulatory proceedings related to the restatement of the Company's financial statements, including the funding of the settlement of such litigation and the risk that the conditions to the effectiveness of such settlements, including the results of the plaintiffs' confirmatory discovery and the approval by the courts, may not be realized.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events.

                            DOLLAR GENERAL CORPORATION                            UNAUDITED INCOME STATEMENTS                                      (000's)                                           ---For the First Quarter Ended---                                                        (restated)  (restated)                                                        April 28,   April 30,                                           May 4, 2001     2000        1999     Sales                                  $1,202,504    $997,079    $844,593     Cost of Sales                             881,079     727,672     615,397     Gross Margin                              321,425     269,407     229,196     Selling, General & Administrative      Expense                                  251,990     213,341     173,990  

Operating Income 69,435 56,066 55,206 Interest Expense 11,600 9,263 4,540 Pre-Tax Income 57,835 46,803 50,666 Taxes 21,602 17,468 18,590 Net Income $36,233 $29,335 $32,076 ======= ======= =======

Diluted earnings per share $0.11 $0.09 $0.10 Weighted average diluted shares 335,184 334,293 337,309

---For the Second Quarter Ended--- (restated) (restated) August 3, July 28, July 30, 2001 2000 1999

Sales $1,225,254 $1,017,418 $915,210 Cost of Sales 893,971 733,368 665,292 Gross Margin 331,283 284,050 249,918 Selling, General & Administrative Expense 276,069 226,988 188,388

Operating Income 55,214 57,062 61,530 Interest Expense 11,957 12,732 6,254 Pre-Tax Income 43,257 44,330 55,276 Taxes 16,157 16,544 20,257 Net Income $27,100 $27,786 $35,019 ======= ======= =======

Diluted earnings per share $0.08 $0.08 $0.10 Weighted average diluted shares 335,402 333,038 339,615

---For the Third Quarter Ended--- (restated) (restated) November 2, October 27, October 29, 2001 2000 1999

Sales $1,309,125 $1,094,360 $950,419 Cost of Sales 927,944 776,016 675,449 Gross Margin 381,181 318,344 274,970 Selling, General & Administrative Expense 295,103 231,933 198,507

Operating Income 86,078 86,411 76,463 Interest Expense 11,480 13,537 8,312 Pre-Tax Income 74,598 72,874 68,151 Taxes 27,861 27,198 24,976 Net Income $46,737 $45,676 $43,175 ======= ======= =======

Diluted earnings per share $0.14 $0.14 $0.13 Weighted average diluted shares 334,857 334,097 338,390

---For the Year-To-date Ended--- (restated) (restated) November 2, October 27, October 29, 2001 2000 1999

Sales $3,736,883 $3,108,857 $2,710,222 Cost of Sales 2,702,994 2,237,056 1,956,138 Gross Margin 1,033,889 871,801 754,084 Selling, General & Administrative Expense 823,162 672,262 560,885

Operating Income 210,727 199,539 193,199 Interest Expense 35,037 35,532 19,106 Pre-Tax Income 175,690 164,007 174,093 Taxes 65,620 61,210 63,823 Net Income $110,070 $102,797 $110,270 ======== ======== ========

Diluted earnings per share $0.33 $0.31 $0.33 Weighted average diluted shares 335,148 333,809 338,438

DOLLAR GENERAL CORPORATION BALANCE SHEETS ($000's)

(unaudited) November 2 February 2 2001 2001 Assets Current Assets: Cash and cash equivalents $74,819 $162,310 Merchandise inventories 1,133,215 896,235 Deferred income taxes 90,307 21,514 Other current assets 48,600 44,868 TOTAL CURRENT ASSETS 1,346,941 1,124,927

Property & equipment, at cost 1,454,268 1,339,554 Less: Accumulated depreciation 456,478 366,460

997,790 973,094

Merchandise inventories 116,000 116,000 Other assets, net 8,535 68,441

TOTAL ASSETS $2,469,266 $2,282,462 ========== ==========

Liabilities & Shareholders' Equity Current Liabilities Current portion of long-term obligations $391,089 $9,035 Accounts payable 381,843 297,262 Accrued expenses and other 223,508 214,192 Income taxes 10,492 17,446 Litigation settlement payable 162,000 0

TOTAL CURRENT LIABILITIES 1,168,932 537,935

Long-Term obligations 347,174 720,764 Litigation settlement payable 0 162,000 TOTAL LIABILITIES 1,516,106 1,420,699

Shareholders' Equity: Common stock 166,302 165,646 Additional paid-in capital 300,622 283,925 Accumulated other comprehensive loss (3,552) 0 Retained earnings 492,473 414,318 Less: Common stock purchased by employee deferred compensation trust 2,685 2,126 TOTAL SHAREHOLDERS' EQUITY 953,160 861,763

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,469,266 $2,282,462 ========== ==========

DOLLAR GENERAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (000's) (Unaudited)

---For the 39-Weeks Ended--- (restated) November 2, 2001 October 27, 2000 Cash flows from operating activities: Net income $110,070 $102,797 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 92,104 83,737 Deferred income taxes (5,795) (12,792) Tax benefit from stock option exercises 5,243 15,021 Change in operating assets and liabilities: Merchandise inventories (236,980) (155,814) Other Current Assets (3,732) 2,517 Accounts payable 84,581 (45,479) Accrued expenses and other 5,759 7,449 Income taxes (6,954) (14,626) Other (2,549) 537

Net cash provided by (used in) operating activities 41,747 (16,653)

Cash flows from investing activities: Purchase of property and equipment (100,184) (193,315) Proceeds from sale of property and equipment 230 97,535

Net cash provided by (used in) investing activities (99,954) (95,780)

Cash flows from financing activities: Issuance of short-term borrowings 0 221,369 Repayments of short-term borrowings 0 (160,000) Issuance of long-term obligations 0 199,584 Repayments of long-term obligations (8,925) (109,472) Payments of cash dividend (31,910) (29,522) Proceeds from exercise of stock options 11,557 29,239 Repurchase of common stock 0 (65,549) Purchase of common stock for deferred compensation plan (6) 0

Net cash provided by (used in) financing activities (29,284) 85,649

Net decrease in cash and cash equivalents (87,491) (26,784) Cash and cash equivalents beginning

of period 162,310 54,742 Cash and cash equivalents end of period $74,819 $27,958

Supplemental schedule of noncash investing and financing activities: Purchase of property and equipment under capital lease obligations $17,393 $110,114

DOLLAR GENERAL CORPORATION KEY OPERATIONAL DATA (000's)

---For the First Quarter Ended--- May 4 April 28 2001 2000 % Chg

Sales by Category: Highly Consumable $721,292 $545,633 32.2% Hardware and Seasonal $168,804 $137,695 22.6% Basic Clothing $130,632 $120,910 8.0% Home Products $181,776 $192,841 -5.7% TOTAL SALES $1,202,504 $997,079 20.6%

---For the Second Quarter Ended--- August 3 July 28 2001 2000 % Chg

Sales by Category: Highly Consumable $737,778 $583,003 26.5% Hardware and Seasonal $185,082 $143,120 29.3% Basic Clothing $131,200 $120,320 9.0% Home Products $171,194 $170,975 0.1% TOTAL SALES $1,225,254 $1,017,418 20.4%

---For the Third Quarter Ended--- November 2 October 27

2001 2000 % Chg Sales by Category: Highly Consumable $796,271 $638,372 24.7% Hardware and Seasonal $185,028 $148,415 24.7% Basic Clothing $148,617 $133,818 11.1% Home Products $179,209 $173,756 3.1% TOTAL SALES $1,309,125 $1,094,361 19.6%

---For 39 Weeks Ended--- November 2 October 27 2001 2000 % Chg Sales by Category: Highly Consumable $2,255,342 $1,767,008 27.6% Hardware and Seasonal $538,913 $429,230 25.6% Basic Clothing $410,448 $375,048 9.4% Home Products $532,180 $537,571 -1.0%

TOTAL SALES $3,736,883 $3,108,857 20.2%

---For 39-Weeks Ended--- November 2 October 27 New Store Activity: 2001 2000

Beginning Store Count 5,000 4,294 New Store Openings 523 646 Store Closings 38 46 Net New Stores 485 600 Ending Store Count 5,485 4,894 Total Selling Square Footage 37.1 million 33.1 million

For the 39-weeks ended November 2, 2001, the average customer purchased approximately 6 items at a total cost of $8.25.

                                                 1Q     2Q     3Q    YTD  

Same-store Customer Transactions 5.1% 4.5% 7.0% 5.5% Average Customer Purchase $8.22 $8.17 $8.35 $8.25

CONTACT:
Investor Contact,
Kiley Fleming, CFA,
+1-615-855-5525,
or
Media Contact,
Andrea Turner,
+1-615-855-5209,
both of Dollar General Corporation