AP Dollar General is opening 900 stores in 2018.
- Dollar General is bucking the
retail trend and expanding rapidly in the United States. It plans to open 900 new stores by the end of the year. - The retailer is capitalizing on a growing trend toward more cost-conscious shopping.
- It offers prices that are 20% to 40% lower than grocery and drug stores. Here's how it keeps its prices so low.
Dollar General is taking over the United States.
This no-frills, bargain-hunters' paradise is growing at a level that is largely "unthinkable" in retail, Credit Suisse analysts wrote in June.
In 2017, Dollar General opened new locations at a rate of around four stores a day. In 2018, 900 more stores are slated to open at a rate of about three stores a day.
While competitors have been squeezed by growing competition online and from Amazon, Dollar General and the dollar-store sector in general have flourished, swooping in and offering customers prices that are 20% to 40% lower than grocery and drug stores.
Sales at US dollar stores grew to $45.3 billion from $30.4 billion between 2010 and 2015. Moody's said it expects this market to grow 8% in 2018, which is about double the growth of what is expected for US retail in general during the same period.
Since it opened its first store in a small town in Kentucky in 1955, Dollar General has stayed true to its roots, predominantly serving rural and suburban low-income customers. The retailer's target shopper comes from a household making $40,000 or less a year and is often living in areas called "food deserts," meaning they are miles away from access to grocery stores.
"The economy is continuing to create more of our core customer," Dollar General CEO Todd Vasos told The Wall Street Journal in December.
When the economy bites, the company flourishes.
"We are putting stores today [in areas] that perhaps five years ago were just on the cusp of probably not being our demographic, and it has now turned to being our demographic," Vasos said to The Journal.
Here's how Dollar General keeps its prices low: