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Dollar General's (DG) Store-Expansion Plans Are Well Underway

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Dollar General Corporation (DG - Free Report) remains committed to smart investments in store infrastructure including openings, expansions, remodels and relocations to drive revenues. In latest developments, management shared plans about the company’s expansion into Idaho, which highlights the retailer’s strong foothold in the 47th US state.

Construction of the store, which is slated to open doors at N. Old Highway 95 in Athol (Kootenai County) by spring next year, is already in progress. This store boosts the company’s Pacific Northwest footprint.

Dollar General offers a curated assortment of trusted brands and private-branded merchandise comprising health and beauty products, housewares, stationery, home-cleaning supplies and seasonal items. It also provides food including milk and dairy products, bread and canned vegetables and fruits among others.

Addition of a DG store targets economic growth of the serving communities through the creation of jobs, higher tax revenues, greater accessibility to affordable and quality products. During the second quarter of fiscal 2021, Dollar General completed nearly 772 real-estate projects including 270 openings, 477 remodels and 25 relocations.

As of July this year, it operated more than 17,600 stores. For fiscal 2021, the company remains on track to carry out 2,900 real-estate projects. This includes 1,050 openings, 1,750 remodels and 100 relocations. In fact, it aims at unveiling more than 1,500 stores with plans to expand to a total of above 2,000 stores by this year end.

More on Store Plans

In late July this year, Dollar General announced that its first two stores offering a combined assortment from a DG Market and pOpshelf in Nashville, TN. This store-within-a-store innovative concept has been enriching guests’ shopping experience for a while now, thereby tapping higher sales.

This combined format looks to offer valuable and trusted products from a DG Market with refreshed merchandise consisting of home décor, beauty and seasonal products, and arts and crafts through pOpshelf. The company opened eight Popshelf locations in the fiscal second quarter, taking the total count to 16. The goal is to operate up to 50 Popshelf locations as well as up to 25 Popshelf store-within-a-store offerings by the end of fiscal 2021.

The company also targets establishing stores with a selling space of approximately 8,500 square feet. It expects this sprawling box along with the existing Dollar General Plus format of a similar size to become base prototypes for the majority of new stores going forward.

The company expects to have nearly 2,000 stores in this format by the end of the current fiscal year. Hence, Dollar General is trying every trick in the book to boost its guests’ experience via unique store concepts, affordable and convenient assortments, and other innovations.

Wrapping Up

Dollar General’s commitment to better pricing, cost containment, private-label offering, effective inventory management, merchandise and supply-chain efficiencies should drive sales and margins ahead. It is also focusing on both consumables and non-consumable items. The company’s operational capabilities coupled with real-estate growth strategies position it well to grab a plum market share by targeting low-to-middle income group consumers.

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This presently Zacks Rank #3 (Hold) stock has gained 7.1% in the past six months compared with the industry’s 13.5% growth.

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