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Dollar General On Track With Expansion, Opens 16000th Store

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Dollar General Corporation (DG - Free Report) is on track with its store expansion and recently opened a new outlet in Panama City, FL. This brings the company’s total store count to 16,000 in 44 states. It also operates 16 traditional distribution centers and four DG Fresh facilities. The company had earlier unveiled plans to open stores in Wyoming and Washington in fiscal 2020, which will expand its presence to 46 states.

The opening was marked by a grand event that included community celebration as well as donations to two schools as part of its Serving Others initiative. Through this initiative, the company supports literacy and education in certain communities, which includes Panama City. Along these lines, Dollar General and The Kellogg Company joined hands to donate $16,000 each to two schools— Cedar Grove Elementary School and Parker Elementary School — during the store launch.

Further, the company offered gift cards worth $10 and tote bags comprising complimentary products to the first 500 customers. Other highlights of the event were giveaways, prizes worth $520 and entertainment provided by Dollar General’s vendor partners. Apart from these, guests received complimentary breakfast and lunch along with samples of exclusive private snack’s brand — Clover Valley.

Dollar General is focused on store openings to expand customer base. During fiscal 2018, the company opened 900 stores, remodeled 1,050 and relocated 115.

In the first half of fiscal 2019, the company opened 489 stores, remodeled 653 outlets (including 254 Dollar General traditional plus remodels) as well as remodeled and relocated 46 units. The company also added produce in 64 outlets, bringing the total number of stores that carry produce to nearly 550.

Going ahead, the company plans to open about 975 stores (of these approximately 10 stores will be in the DGX format), remodel 1,000 outlets and relocate 100 in fiscal 2019. Of the planned remodels, the company plans to convert approximately 500 stores in the Dollar General traditional plus format.

Wrapping Up

Dollar General’s better pricing, private label offering, inventory management, merchandise and operational initiatives as well as store-expansion endeavors are expected to drive sales. In fact, management anticipates net sales growth of 8% with same-store sales expected to increase in the low-to-mid 3% range in fiscal 2019. We believe that the company’s everyday low-price model will likely drive traffic persistently, despite rising popularity of online retailers.

Notably, shares of this Zack Rank #3 (Hold) company have gained 17.8% in the past three months compared with the industry’s growth of 10.5%.



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