Dollar General Will Open 900 New Stores Next Year

Dollar General

For the second year in a row, Dollar General (NYSE:DG) will be opening 900 new stores in the upcoming year.

“Our first priority remains investing in new stores where we continue to see great returns,” said CFO John Garratt.

Currently, the discount chain has more stores in 44 different US states with a total number of stores exceeding 14,000. Compared to 5 years ago, this is a 35%.

The company wants to up that even more. By the end of 2018, more than three in four Americans will live within 5 miles of a Dollar General.

While many brick-and-mortar retailers are struggling in the shadow of online retailers, dollar stores are actually thriving. Dollar General has seen an increase in its shares of 25% in the past year, while Dollar Tree (NASDAQ:DLTR) has grown 38%.

The success of Dollar General stems largely from its meager business model, according to GlobalData Retail analyst Neil Saunders. It functions through small stores that sell cheap daily essentials and can operate in isolated, rural areas where other larger retailers, such as Walmart (NYSE:WMT), cannot.

“The company [is] the closest and most convenient general merchant for millions,” said Saunders.

Dollar General sales grew 4.3% in the last quarter for stores that were opened a year ago, while revenue increased 11% to $5.9 billion.

There are middle income and upper-class shoppers who help with Dollar General’s overall sales, but the main source of sales is from lower-income customers.

Analysts expect Dollar General to continue with its success so long as government benefits to support lower-income individuals remain steady.

Featured Image: twitter


About the author: Samara graduated from Simon Fraser University with a BA in English, minoring in Publishing and Creative Writing. One day she hopes to publish her very own novel, but in the meantime, she contents herself with blogging and editing. She currently specializes in writing financial news and analysis, as well as cryptocurrency news and information.