Dollar General keeps expanding even as discount rivals like Family Dollar shrink.
The company said Thursday it will open 975 new stores in the United States this year. Dollar General will also remodel 1,000 older stores with new queue lines to drive last-minute impulse buys. It will also spruce up its health and beauty sections.
Dollar General has been growing for years in rural America. It opened 900 stores in 2018 and 1,315 the year prior. It has more than 14,500 stores across the country and sales have increased for 29 straight years.
Dollar General caters mainly to low-and-middle-income shoppers customers in rural and suburban areas. That helps it stand out against suburban chains like Dollar Tree and Family Dollar, which focuses on urban customers. Family Dollar has struggled in recent years and will close nearly 400 stores this year.
Dollar General looks to build stores in rural areas where a big box retailer or grocery store is not within 15 or 20 miles. That gives the company close proximity to shoppers and compels more frequent store visits. The company says 75% of its locations are in towns with 20,000 or fewer people.
The uneven economic recovery in the United States has buoyed Dollar General in recent years.
“While the economy is doing very well, our core customer continues to struggle,” Dollar General chief executive Todd Vasos told analysts last year.
Dollar General even surged during the holidays. Dollar General’s sales at stores open at least a year increased 4% during its most recent quarter compared with a year earlier, beating analysts expectations.
The US government shutdown helped Dollar General sales because the Agriculture Department doled out February SNAP benefits early, the company said. It also got a boost from more shoppers buying food and home products, such as kitchenware and small appliances.
In 2019, Dollar General plans to focus on selling more groceries and fresh food. It is adding produce sections and refrigerators to hundreds of stores.
Dollar General has said that offering fruit and vegetables at stores in rural and urban food deserts can “drive a tremendous amount of traffic.”
The strategy could also help Dollar General compete with bigger rivals such as Walmart and beat back the threat of German discount grocery chains Aldi and Lidl. Aldi has poured billions of dollars into new stores with fresh food sections. Lidl acquired a couple dozen Best Market grocery stores in New York and New Jersey last month.