Here's Why Dollar General Is Booming Amid the Retail Apocalypse
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Apparently, everybody still loves shopping for deals at the dollar store. Dollar General continues to shine even as its retail brethren close stores at record levels.
The discount variety store just posted sales of about $7 billion for its fiscal third quarter, up 9% year-over-year.
“The quarter was highlighted by our best customer traffic and same-store sales increases in nearly five years," CEO Todd Vasos said in an earnings call on Thursday.
Dollar General plans to open roughly 1,000 new stores throughout 2020, Vasos said, in addition to opening hundreds of new stores in 2019.
The last decade has been one long victory lap for Dollar General, which has grown profits and opened thousands of stores as dozens of other U.S. retailers fall victim to the "retail apocalypse." Dollar General stock is up roughly 600% over the past 10 years.
As Money previously reported, Americans significantly increased spending more of their hard-earned dollars at discount chains during the 2007-2009 recession, which devastated bank accounts and forced consumers to lead less expensive lifestyles. According to one widely-referenced study, there have been more U.S. dollar stores than drugstores since 2011.
Today, about 75% of Americans like within five miles of a Dollar General, but the bulk of the company's locations are in small towns with few other places to shop, NBC News reports. The majority of Dollar General customers earn less than $40,000 per household.
“The economy is continuing to create more of our core customer,” Vasos told the Wall Street Journal in 2017. “We are putting stores today [in areas] that perhaps five years ago were just on the cusp of probably not being our demographic...and it has now turned to being our demographic.”
Dollar General currently has more than 16,000 stores in the United States, and it's rapidly expanding. Compare that to stores like Forever 21, Payless, and other once-thriving shopping staples that have recently filed for bankruptcy or gone out of business entirely.
As of this writing, U.S. retailers have announced more than 9,300 store closures in 2019, according to Business Insider. Experts predict tens of thousands more stores to shutter within the next five years.