It is no secret that many retailers are struggling, with multiple big names filing for bankruptcy and closing stores, despite having been mainstays for decades. Dollar General is proving that not all retailers are facing challenges. While others are shuttering their doors and downsizing, Dollar General will be opening a whopping 975 more stores.

The Plans

According to the CEO of Dollar General, Todd Vasos, Dollar General has plenty of plans for expansion. They plan on having 975 new store openings this year. There will also be 100 relocations and 1,000 remodels of the stores that are more “mature.” According to Vasos, ten of those new stores will be unique. Those will be smaller concepts, about half the size of other Dollar General stores. Those locations will specifically target younger customers.

A Result of Great Numbers

The announcement of an expansion for Dollar General is not surprising given the company’s recent sales figures. The retailer’s fourth-quarter net sales increased by 8.5 percent, from $6.1 billion in 2017 to $6.6 billion in 2018. Additionally, same-store sales increased by 4 percent in consecutive years. Both customer traffic and the amount of the average transaction have increased. Most of the growth took place in home, seasonal, and consumables departments while apparel had a decline.

Even so, the net income for the quarter did fall, with $483 million as gross profit instead of $712. In terms of a percent of net sales, this indicates a decrease from 32.1 percent to 31.2 percent. This change is linked to higher markdowns and more of the sales being from combustibles with lower margins.

Other New Initiatives

In addition to the opening of nearly 1,000 new stores and remodeling many of the existing ones, Dollar General will be adding two new strategic initiatives. Fast Track will improve labor productivity as well as customer convenience and should launch soon. DG Fresh is already operational in approximately 300 stores and focuses on offering frozen and fresh products.

Source:

https://www.retaildive.com/news/markdowns-margins-squeeze-dollar-general-profits/550491/

The post Despite Many Retailers Struggling, Dollar General Is Opening Almost 1,000 New Stores appeared first on Subastral Inc..