Dollar General: Company Description

Dollar General is a US-based discount retailer operating 16,094 stores in 44 states across the US (as of November 1, 2019). Most stores are located in the Southern, South-Western, Mid-Western and Eastern parts of US. The retailer offers an assortment of products in four main categories: consumables, seasonal products, home products and apparel. Dollar General’s merchandise includes health and beauty products, home cleaning supplies, cookware, kitchen supplies, toys and clothing. It sells products from leading national brands such as Hanes, Coca-Cola, Mars, Unilever, PepsiCo and others. It also offers private-label products, such as Clover Valley, True Living, DG Home, DG Baby, DG Health, DG Office, Comfort Bay and Bobbie Brooks. The retailer’s business model focuses on everyday low prices (typically $10 or less) for a broad range of merchandise in small neighborhood stores at convenient locations in rural, suburban and urban communities, and offering a time-saving shopping experience. [caption id="attachment_102673" align="aligncenter" width="700"] Source: Company reports[/caption]  

Key Events Overview: 2017-2019

In the last three years, Dollar General has continued to focus on growth by adding new stores in both new and existing markets, and relocating and remodeling existing stores to maximize customer reach. In December 2019, the company announced plans to open 1,000 new stores, remodel 1,500 others and relocate 80 more in fiscal year 2020 (ending January 29, 2021). Dollar General’s store expansion included 1,315 store openings in fiscal 2017, 900 in fiscal 2018 and 975 in fiscal 2019. In February 2017, the company opened its first store in North Dakota, its 44th US state. In September 2019, it announced plans to add two more: Washington and Wyoming, expected to open in 2020. In January 2017, Dollar General opened its first small-format DGX store in Nashville, Tennessee. The compact format is designed to offer urban shoppers a focused selection of consumable items and instant consumption products. Dollar General plans to open around 20 DGX stores by the end of 2020, for a total of around 30. As of December 2019, Dollar General operated 17 distribution centers strategically located throughout the retailer’s geographic footprint. This includes three distribution centers the company opened in the last three years, one in Janesville, Wisconsin; one in Longview, Texas; and another in Jackson, Georgia. In December 2019, the retailer began shipping from its Amsterdam, New York, distribution center. Dollar General is also seeking to position itself as a one-stop grocery destination. In 2019, Dollar General launched two key initiatives: DG Fresh and Fast Track. DG Fresh is a self-distribution model for fresh and frozen products which aims to increase sales, reduce product cost and enhance in-stock position. As of November 1, 2019, the retailer operated four DG Fresh distribution centers supporting approximately 4,900 stores. Dollar General also launched the Fast Track initiative, designed to enhance the retailer’s convenience proposition, improve in-stock position and increase labor productivity. In May 2018, Dollar General launched its “Better for You” initiative, focused on promoting and raising awareness on the availability of healthy food products. The company launched the initiative in more than 2,500 stores in 2018 and announced plans to extend it to around 6,000 by the end of 2019. In June 2019, Dollar General partnered with FedEx to allow customers to drop off and pick up packages at 1,500 Dollar General stores, to be expanded to 8,000 stores by the end of 2020. Under this partnership, Dollar General expects the service to drive footfall, which should drive incremental sales. Dollar General is also investing in its digital capabilities. Dollar General launched the DG GO! app in 2018 with a “cart calculator” feature and piloted the buy online, pick up in store (BOPIS) service called DG Pickup in select stores during the fourth quarter of fiscal year 2019. Figure 2. Dollar General: Events Timeline, 2009–2019 [wpdatatable id=55]

Source: Company reports/S&P Capital IQ/Coresight Research