Dollar General’s Upscale Dollar Store Could Help Suburban Shoppers Beat Inflation

Marion - Circa March 2019: Dollar General Retail Location.
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Customers are the lifeblood of any business. Knowing how to market a company properly is one of the most difficult endeavors one will ever attempt, but growing its business — without alienating its existing customer base — is exactly what discount variety store Dollar General is attempting to do with its plans for establishing 1,000 Popshelf stores.

With inflation not that far removed from its record highs early this year, Dollar General is bucking the trend of other retailers who are dialing back business or finding ways to save. Instead, the discount giant is advancing full tilt with its plan to grow its Popshelf brand — aimed at more affluent suburban customers — across the United States.  

Dollar General announced its plans for the Popshelf store concept in 2020 and has slowly been adding store locations. According to CNBC, the retailer plans on having a total of 300 Popshelf stores established in 2023 — and 1,000 over the next three years (it now has approximately 100 stores in nine states). Additionally, about 40 mini-Popshelf stores have been tried out within existing Dollar General outlets.

The goal of Popshelf is to attract consumers with annual household incomes in the range of $50,000 and $125,000, per CNBC. Providing shoppers with cheaper but trendy seasonal and home décor, health and beauty must-haves, home cleaning supplies, party goods and entertaining needs, Dollar General is hoping to draw a new customer group that is looking for a “fun, affordable and stress-free shopping experience.”

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Engaging new consumers with low-priced goods (the DG site states that 95% of the items found within its Popshelf stores will be on sale for $5 or less) is the immediate goal. The big picture plan includes a substantial earnings increase, of course.

If any company can take on this sort of challenge at this time and succeed, it might be Dollar General. As CNBC stated, while the S&P 500 Index has decreased about 16% so far this year, Dollar General shares have risen about 4%. With Popshelf, Dollar General is expecting between $1.7-$2 million in sales annually at each of its stores, with a 40% average gross margin rate.

According to its website, Dollar General operates over 18,000 neighborhood general stores across 47 U.S. states in the continental United States and has firm plans to open as many as 10 stores in Mexico by 2023.

The Goodlettsville, Tennessee-based company began in 1939 as a family-owned business called J.L. Turner and Son in Scottsville, Kentucky. It changed its name to Dollar General Corporation in 1955 and went public on the New York Stock Exchange in 1968.

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