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Takeaway: The key margin driver for Dollar General might not have much more room to run.

Dollar General (DG) reported earnings earlier this morning, which showed sales growth but also improving margins. But, the key margin driver for DG is slowing as you'll see from the chart below.

Consumables, items like food or other perishables that have consumers returning frequently to the stores, now account for 74% of total sales, up from 69% and about has high as they can really go. This high percentage of consumables creates more frequent visits to the stores, improves comparable sales and ultimately makes margins higher.

As such, the rate of margin improvement will slow, and that will hamper the pace of appreciation in DG's stock price, too.

Dollar General: On the Margin - Dollar General 032513