The Road to 34,000 Stores
2021: 18,227 (est.)
Source: Dollar General financial reports
“Similar to our larger-footprint DGP concept, the first new format has selling space of approximately 8,500 square feet, which compares to about 7,300 square feet of selling space for our traditional store,” CEO Todd Vasos said. “Beginning later this year, this new format, along with our DGP concept, will become our base prototype for nearly all new stores, replacing both our traditional and higher cooler-count DGTP format, allowing for a more optimized assortment and room to accommodate future growth.”
According to Vasos, the company’s second new format is even larger, with approximately 9,500 square selling feet, and will be deployed opportunistically across new store relocation and remodel opportunities.
“Notably, on average, our DGP and new store formats are outperforming the chain on a comp-sales basis and have considerably higher sales volumes compared to both the traditional and DGTP store, which bodes well for the future as we look to increase their unit counts in the years ahead,” Vasos said.
For the fourth quarter ended Jan. 29, Dollar General reported that same-store sales increased by 12.7% on a year-over-year basis and operating profit was up 21% to $872 million; revenue increased 17.6% to $8.4 billion. For fiscal 2020, Dollar General’s same-store sales were up 16.3% and its operating profit grew 54% to $3.6 billion; revenue increased 21.6% to $33.7 billion. The retailer did forecast, as have others in the industry, such as Albertsons Cos. and Grocery Outlet, that it expects a same-store sales decline of 4% to 6% in fiscal 2021. However, on a two-year stack basis, the company projects that it will see comps increase 10% to 12% when compared with the company’s performance in 2019.
Vasos said that the company is seeing increased market share in highly consumable product sales, as well as new subsets of customers.
“These new customers continue to skew younger, higher-income and more ethnically diverse, underscoring the broadening appeal of our value and convenience proposition,” Vasos noted. “We continue to be encouraged by the retention rates of new customers, and we are working to drive even higher levels of engagement with more personalized marketing and continued execution of our key initiatives.”
The larger market share and new customers can most likely be attributed to the retailer’s other key initiative for growth: fresh food.