A Dollar General store. The company opened its 20,000th location earlier this year. Permission granted by Dollar General
Nate Delesline III
Source: www.retaildive.com, April 2024
By committing to smaller, rural markets, the retailer has room to grow its substantial store footprint, industry experts and company leaders say.
Dollar General reached a milestone in February with the opening of its 20,000th store in southeastern Texas. And the retailer wants to keep growing.
During an earnings call in March, Dollar General said it expects to complete 2,385 real estate-related projects this year. That includes opening 800 more new stores, remodeling 1,500 locations, and relocating 85 stores.
Comparison helps put Dollar General’s substantial size in context. Just five states – Texas, Georgia, Florida, North Carolina and Pennsylvania – have over 5,800 Dollar General stores, which is more shops than Walmart has in the U.S. overall.
In the face of persistent inflation and discretionary spending pressures, Dollar General’s real estate strategy is accelerating. As the management of brick-and-mortar retail assets becomes more important than ever, the company has maintained consistent store growth despite ever-shifting trends.
Dollar General’s achievement of opening 20,000 stores didn’t happen overnight,” Jonathan Zhang, an associate professor in business at Colorado State University, told Retail Dive in an email. Zhang, who studies retail and consumer behavior, said the Tennessee-based retailer’s strategic maneuvering, ability to understand the pulse of the consumer and unwavering commitment to under-served markets helped enable the retailer’s rise.
Virginia-based Dollar Tree, which also owns the Family Dollar brand, is close behind Dollar General, with a store count of about 16,774 locations between both banners as of Feb. 3.
The retailer said in a February regulatory filing that it saw more room for growth, with a long-term potential to support more than 10,000 Dollar Tree and 15,000 Family Dollar stores in the U.S. But in a reversal last month, Dollar Tree said during an earnings call that it plans to close 600 Family Dollar Stores this year. The company plans to close 370 more Family Dollar locations and 30 Dollar Tree stores as leases expire – 1,000 in total.
“The dollar stores have been on an expansionary tear over the past ten years and now have extremely large store estates,” Neil Saunders, managing director of GlobalData, told Retail Dive in emailed comments ahead of the rival retailers’ earnings announcements. “Most of this is because dollar stores serve relatively small catchments, so there’s a lot of potential sites for new stores, including in rural areas. The [payback] time on a new store is quick, so it is relatively easy to push heavy expansion from a capital investment standpoint.”
