In these lean times, consumers often grumble that many items in a dollar store aren’t actually a dollar. But that doesn’t mean that such retailers aren’t offering bargains. It’s just that the long-term trend of inflation causes the dollar to fetch less with each passing year.

Still, these deep-discount retailers can now be found in most strip malls and shopping centers across the US. In fact, dollar store chains comprise a $56 billion industry and now boast 21,500 locations nationwide, as compared to the 19,700 locations of their drugstore competitors.

With about 9,800 stores densely packed into the eastern two-thirds of the US and a market cap of roughly $14 billion, Dollar General Corp (NYSE: DG) is easily the nation’s largest dollar store chain.

While some dollar stores largely sell generic products, Dollar General prides itself on offering wares made by national brands ranging from Procter & Gamble (NYSE: PG) to Coca-Cola (NYSE: KO). 

When the first Dollar General opened its doors in Kentucky in 1955, its policy was to sell everything for one dollar or less. Although Dollar General still retains the word “dollar” in its moniker, the more than 10,000 products it sells can range from $1 to $60.

Discount retail is a crowded space and Dollar General faces competition from numerous other discount retailers, including other dollar store chains, drugstores and even discount retailing giant Wal-Mart (NYSE: WMT). 

Dollar General’s stores have a smaller footprint than Wal-Mart’s typical big-box approach. In the past, that enabled Dollar General to serve the smaller communities that Wal-Mart couldn’t reach. Indeed, the company has been able to steal market share from Wal-Mart because its stores are more accessible, offer competitive prices, and its 7,200- square-foot locations don’t overwhelm shoppers with endless aisles.

Dollar General’s growth has also fared well against its dollar store peers. The company plans to build 625 new stores in 2012, as compared to Family Dollar Stores’ (NYSE: FDO) 500, and a mere 12 for 99 Cents Only Stores. 

In 2012, Dollar General will mark its debut in California by opening 50 stores. With those openings, Dollar General will have a presence in 39 states overall, so it has further room to grow domestically.

In recent years, the company has expanded its concept to capitalize on other revenue opportunities, such as groceries. For example, management is ramping up openings of Dollar General Market, which offers groceries in addition to many of Dollar General’s typical product lines. The company opened 12 Dollar General Markets in 2011 and plans to add 40 more in 2012. 

Recently, Dollar General began petitioning to obtain alcoholic beverage licenses to sell beer and wine in 30 stores in Indiana. If successful, the company will be able to generate higher margins for its stores, while also competing against larger retail chains that sell alcohol. The company has also applied for alcoholic beverage permits in several other states.

During the third quarter, Dollar General’s sales increased 11.5 percent to $3.6 billion from the year-ago period, while net income grew 33.6 percent to $171.2 million. Over that same period, the company’s same-store sales rose 6.3 percent. 

Dollar General’s shares have a forward earnings ratio of 20 and hit an all-time high of $43 in late January. But considering the company’s steady sales, strong store growth and rising margins, Dollar General’s long-term growth story is still unfolding.