Home / Business / More people are buying food at Dollar General, which helps boost the company's sales

More people are buying food at Dollar General, which helps boost the company's sales



It is no secret that the retail industry is in crisis: dozens of chains have filed for bankruptcy protection this year, and many others are closing hundreds of stores.

But Dollar General, the discount chain based in Tennessee, is resisting the trend. The company says sales increased 11 percent in the most recent quarter, as it strengthened its selection of frozen foods and added products to some of its locations. It will open some 900 new stores next year and will remodel another 1,000.

The goal: to be as convenient as it is affordable. The company is focusing not only on rural areas, where many of its clients already stop for needs, but also in larger metropolitan areas where it hopes to attract a new group of more affluent clients. By the end of this year, executives say that 75 percent of Americans will live within a 5-mile radius of Dollar General.

"We continue to believe that we operate in one of the most attractive sectors of the retail sector," said CEO Todd Vasos. a Thursday morning call with the analysts. "Our customers love the treasure hunt in the one-stop shop."

Over the past five years, the company has expanded its snack and beverage aisles, and nearly doubled the amount of freezing space in its stores to accommodate more frozen pizzas, ice cream and other takeaway items. A handful of remodeled stores are also offering fresh food.

Dollar General has also added more branded products such as Tide Detergent, while expanding its own line of private label items. It also seeks to modernize its health and beauty departments, hoping to conquer buyers who would otherwise buy items such as shampoo and makeup in pharmacies.

"The company is capturing a more significant part of the spending of middle-income and wealthier Americans," wrote Neil Saunders, CEO of GlobalData Retail, in a note to clients. "Dollar General has redesigned the cosmetics area in many stores to better show the trend products, the first indications suggest that these changes are working well and are driving market share."

Dollar General, which was founded in 1968, has more than $ 21 billion in annual revenues. In the most recent quarter, sales increased 11 percent to $ 5.9 billion, while profits increased 4 percent to $ 252.53 million. The company said the recent hurricane across the country also contributed to spending on its stores.

The company's shares rose nearly 3 percent on Thursday to its highest level in more than a year.

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