Dollar General is spending big on its brick-and-mortar stores in 2018, introducing new merchandise and technologies to boost convenience for customers. Roughly 75 percent of the U.S. population lives near one of Dollar General’s 14,500 stores, says CEO Todd Vasos. “Our customers are utilizing digital more to plan their visits and want more options on how they engage with us in-store,” Vasos said on a fourth-quarter earnings call.
Small change Dollar General opened its first smaller-format, urban DGX store, in Nashville, Tenn., inside a section of a former TGI Fridays restaurant
Dollar General is testing a shop-and-scan mobile app service in select stores. “This mobile app allows customers to scan items while they shop and [to] pay directly with their phones, allowing for a faster and easier checkout experience," Vasos said. "Not only does shop-and-scan help customers save time, it also makes staying on budget easier. Customers can see the price of individual items as they scan them, along with a running total.” The company has plans to expand this service to additional stores this year.
The retailer will also keep an opportunistic eye out for real estate plays, says Vasos. “We have a proven high-return, low-risk model for our real estate growth," he said. "Our flexible real estate model allows us the ability to invest in new-store growth, enter new markets, deliver new formats and reinvest in our mature store base. We constantly monitor new-store productivity and returns to ensure new-store growth is the best use of our capital.” New stores must achieve returns of roughly 20 percent within 2 years of opening, on average, before the company considers them successful, he says.
This year Dollar General will open about 900 stores, remodel 1,000 mature ones and relocate approximately 100. This totals roughly 2,000 projects as the company continues to deploy capital to such high-return investments, Vasos says.
Dollar General stores will also be adding an assortment of fresh produce to more stores, with the goal of selling such product at 450 of its stores by the end of this year. “The ability to offer produce,” Vasos said, "particularly in areas with limited grocery availability, represents an attractive growth opportunity for Dollar General in the years ahead.”
By Brannon Boswell
Executive Editor, Commerce + Communities Today
