Monday, December 4, 2017

Boom Times at Dollar General

The CEO of Dollar General describes his customers like this:
Doesn’t look at her pantry or her refrigerator and say, ‘You know, I’m going to be out of ketchup in the next few days. I’m going to order a few bottles. The core customer uses the last bit of ketchup at the table the night prior, and either on her way to work or on her way home picks up one bottle.
More prosaically, they target families with incomes of less than $40,000 a year. And things are booming for them:
The retailer relies on rapid store openings to keep revenue climbing and investors happy; 2016 marked its 27th consecutive year of sales growth in stores open at least a year.

While many large retailers are closing locations, Dollar General executives said they planned to build thousands more stores, mostly in small communities that have otherwise shown few signs of the U.S. economic recovery.

The more the rural U.S. struggles, company officials said, the more places Dollar General has found to prosper. “The economy is continuing to create more of our core customer,” Chief Executive Todd Vasos said in an interview at the company’s Goodlettsville, Tenn., headquarters.

“We are putting stores today [in areas] that perhaps five years ago were just on the cusp of probably not being our demographic,” he said, “and it has now turned to being our demographic.”
This is what I meant the other day when I wrote that although the big economic statistics are trending upward, to much of the country it still feels like we are in a recession.


JustPeachy said...

Our neighborhood just got a Dollar General. The little gas-n-grocery we used to have went out of business over a decade ago when the owner got cancer, so it's nice to once again have somewhere to buy milk, eggs, and laundry detergent in a pinch. We have no other retail establishments in the surrounding ten miles or so (rural), except for the new Exxon station (come to think of it, you can get milk, eggs, and dog food there, too, so perhaps the DG is redundant-- but hey, I can walk there). DG has been popping up like mushrooms after a rain in my county, the last two years.

We're also seeing new Piggly Wigglys everywhere, which is discount groceries (no fancy cheese)-- everything is wholesale plus 10% at the register, and they specialize in meats that were sliced ugly by trainee meatpacking employees, and animal parts you might not find in other grocery stores (hearts, gizzards, feet...). They also have the best produce department in town, and sell local honey. The PW expansion is a cause for celebration, IMO. Unlike Walmart, they are spectacularly good at adapting to local market needs (they're a franchise, and the local owner is given a lot of leeway on what to stock). There's a new one in the most backwater part of our region. It's tiny, but packs in all the essential meat, fresh produce, baking ingredients, etc. that you might need, and also has a really decent selection of bait and tackle and ammo (which you don't find at the big PW in town). I've explored other new PWs in the more agricultural areas north of here, and find they sell a wide range of deer corn and livestock feed.

I'm not DG's target market (everything's a long drive: we plan ahead!), but man, I LOVE Piggly Wiggly.

John said...

Thanks, that's very interesting.