Dollar General conquered rural America. Now it’s eying on grocery and home goods.

Despite short-term profitability issues, Dollar General’s transformation into grocery and home goods is moving forward.

What to know

In the last two decades, Dollar General spread like wildfire throughout America. It’s used a basic strategy to transform itself from a mid-south operator into the 17th largest retailer in America.

• Lower real estate costs by never buying and always leasing small-footprint stores.
• Simplify inventory and purchasing power by only carrying 10–12,000 items-most of which are shelf stable.
• Lure shoppers in with low absolute cost while maintaining big margins through high unit costs.
• Lower operating costs by underpaying and understaffing stores.
• Avoid big-name competition by locating stores in rural areas where even Walmart won’t go.

In 2013 revenues at the Tennessee-based retailer neared $16 billion. In 2022, the company crossed $35 billion in annual income, doubling its revenue in under a decade. In that same period, Dollar General added around 6,500 stores to its footprint-with many more to come.

Dollar General is adding more stores and entering traditional grocery.

• In 2023, the company plans to open 1,050 new stores.
• Most are deviating from the traditional strategy. In 2021, Dollar General started carrying refrigerated and frozen goods across its 19,000 stores.
• The scale of the investment is impressive. By the fiscal close, the company plans to install over 65,000 cooler doors across its retail network.
• Refrigerated and frozen food is just the start. 3,000 stores now carry fresh produce. Management plans to expand fresh offerings to 10,000 stores by the end of 2023.
• CEO Jeff Owen attributes a 1% increase in gross margin to the initiative.

Dollar General expanded into home goods with pOpshelf.

• Launched in 2020, pOpshelf is a clone of 5-Below. The company leverages its existing buying and…