Dollar General Withdraws Commitment to Cage-Free Eggs
Dollar General has shared that it will not meet its goal to transition to 100% cage-free in-shell eggs by 2025, and that it will not set a new goal.
The discount retailer set its goal for cage-free eggs in 2016. However, in its 2023 proxy statement to shareholders, Dollar General explained that, given the current macroeconomic environment, the state of the egg production industry and the affordability needs of customers, who are either unable or unwilling to pay a higher price for cage-free eggs if there is a lower-price alternative, it’s not reasonably practicable to transition to 100% cage-free in-shell eggs by 2025. Following this update, more than 63% of shareholders voted against the cage-free goal.
“Customer needs and preferences for lower-priced conventional eggs versus higher-priced cage-free eggs, as well as supply availability for cage-free eggs, remain significant considerations,” explained Dollar General in a company statement. “While we are hopeful that, with the passage of time, the price of cage-free in-shell eggs will decline so that cage-free eggs become a viable, equally affordable option, our responsibility remains oriented towards our customers and our shareholders. As a result, we are withdrawing our cage-free egg goal and do not believe it is in our customers’ or shareholders’ best interests at this time to establish a new goal. We appreciate the feedback from our shareholders and the support for ensuring that the customer remains at the center of all that we do."
[Read more: "Cage-Free Egg Production on Shaky Ground"]
According to data from the U.S. Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI) average cost of a dozen Grade A large eggs last month was $2.14, but free-range eggs tend to cost more due to the additional costs associated with allowing the birds to roam freely. Yet this is still a far cry from the start of the year, when egg prices skyrocketed. According to BLS, the CPI average price in January was $4.82 a dozen. During this time, shoppers in California were encountering a dozen eggs for $7.37, while some shoppers at specialty grocery stores even saw $11 a dozen. Various factors contributed to the egg price hikes, including higher feed and energy costs, supply chain challenges, and, perhaps most important, bird flu. The spread of a highly pathogenic strain of bird flu that began last year hampered populations and, hence, egg supplies. According to the U.S. Department of Agriculture (USDA), nearly 50 million birds died or were culled due to the virus in 2022.
Meanwhile, although Dollar General recently reported better-than-expected quarterly earnings and revenue, CEO Todd Vasos said he was “not satisfied” with the company’s third-quarter results, including a significant headwind from inventory shrink.
“Over the last several weeks, we have spent significant time reviewing all areas of the business, and we have identified key opportunities for improvement both in the near term and over the longer term,” said Vasos, who returned as CEO in October, after serving in the role from June 2015 to November 2022.
On the chain’s earnings call, Vasos outlined plans that include increasing upfront store staff at the checkout area, which he said should help with shrink. The company is also looking to get products to store shelves faster by reallocating labor investments toward store-level inventory-management processes.
As of Nov. 3, Goodlettsville, Tenn.-based Dollar General operated 19,726 Dollar General, DG Market, DGX and PopShelf stores across the United States and Mi Súper Dollar General stores in Mexico. The company is No. 16 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named Dollar General as a 2023 Impact Award winner for its food security/nutritional leadership.
