Dollar General Testing Fresh Produce

At some of its recently renovated stores, Dollar General Corp. has been carrying fresh produce as part of the retailer’s wider strategy of expanding its perishable offering, the company revealed during a quarterly earnings call last week.

“The remodeling of about 300 traditional stores based on lessons learned from the conversion of acquired sites last year is on track,” noted Todd Vasos, CEO of Goodlettsville, Tenn.-based Dollar General during the call. “The remodels include increasing the cooler set to 34 doors, an increase of about a 160 percent on average from the existing cooler footprint for these locations. This allows for a greater perishable assortment, which helps drive trips and basket size. Additionally, across about a third of these locations, we are testing an assortment of fresh produce. While it’s still very early, initial remodels are yielding strong same-store sales improvements.”

Later in the call, Vasos observed, in answer to an analyst’s question, that Dollar General had taken learnings from its Market stores, which debuted in 2013 and already offer produce, and was applying them in the remodeled locations.

For the company’s first quarter of fiscal 2017 ended May 5, it reported a net sales increase of 6.5 percent to $5.61 billion, compared with $5.27 billion in year-ago period, while same-store sales in the 2017 first quarter edged up 0.7 percent from last year, which Dollar General attributed mainly to an increase in average transaction amount, partly offset by a decline in traffic. The company added that same-store sales were driven by positive results in the consumables and apparel categories, partly offset by negative results in the home and seasonal categories, and that the net sales rise was also positively affected by sales from new stores, partly offset by sales from closed stores.

In other Dollar General news, nearly 1,000 of its associates, their families and company executives were joined by U.S. House Speaker Paul Ryan, along with state and local officials, for the June 3 grand opening of the discount retailer’s 14th distribution center, in Janesville, Wis. The $100 million facility will provide more than 500 local jobs.

Dollar General operates 13,601 stores in 44 states.