Dollar General reports earnings, describes path forward on fresh
Dollar General generated $6.6 billion in net sales in the first quarter and saw comparable store sales grow 3.8%.
The retailer opened 240 new stores in the quarter and closed 13, bringing its total store count to 15,597, according to a news release. Dollar General expects to open 975 stores total in 2019 and plans to remodel another 1,000 stores and relocate 100 more.
CEO Todd Vasos discussed the company’s strategy on an earnings call May 30, and one of the topics was Dollar General’s move to self-distribution for fresh and frozen foods.
The DG Fresh initiative is expected to meaningfully increase margin on fresh and frozen food items, Vasos said. The move should also allow the company to carry a wider selection of national and private brands.
Dollar General started shipping from its first DG Fresh facility, in Pottsville, Pa., earlier this year, and that distribution center is now servicing 800 stores in the Northeast.
The company hopes to open three more facilities this year, the first of which opens in Clayton, N.C. in just a few weeks. The four facilities together could supply up to 5,000 stores.
Fresh produce is not included in the initial rollout of DG Fresh, but the company believes the initiative could provide a path forward to expand that offering as well.
Other projects in the works for the company include its scan-and-go and coupon-clipping apps, and Dollar General is also planning to launch a self-checkout pilot, scheduled to begin later this year in select stores.
The retailer is also looking to improve its efficiency in the stocking process. The plan is to reduce the number of steps needed to get the product from a truck to store shelves, and Dollar General also wants to incorporate more shelf-ready packaging.