5 Highlights From Dollar General’s 3rd-Quarter 2018

GOODLETTSVILLE, Tenn. -- Dollar General Corp. garnered $6.4 billion in net sales during its 2018 fiscal third quarter, an 8.7% increase from December 2017. The growth resulted from increased sales contributions from the company’s new stores as well as a spark in same-store sales, said Tom Vasos, CEO of the Goodlettsville, Tenn.-based company.

“We delivered another solid quarter, and we are proud of our results,” Vasos said during Dollar General’s third-quarter earnings call on Dec 4. “We continue to be excited about our business and believe we operate in the most attractive sector in retail. We have a differentiated business model that leverages our real estate expertise and our low-cost operating experience with our laser focus on delivering value and convenience to our customers.”

But increased sales weren’t the only high points of the company’s past few months. Here are five highlights from Dollar General’s third quarter …

Earlier this year, Dollar General said it would open 900 new stores, remodel 1,000 mature stores and relocate 100 stores. Vasos said the company is on track to achieve these goals by the end of the fiscal year.

“This year through the end of the third quarter, we have opened 750 new stores, remodeled 925 stores and relocated 92 stores,” he said. “Of the 925 remodeled stores, 359 were remodeled into the Dollar General Traditional Plus (DGTP) format. We included a fresh produce section in 107 of these DGTP remodels.”

The DGTP format is the traditional Dollar General store with an expanded cooler.

Heading into 2019, Dollar General plans to open 975 new stores—10 of which will be in its DGX format, which launched in January 2017. DGX stores are roughly half the size of a traditional Dollar General store and feature soda fountains, coffee stations and grab-and-go sandwiches. Dollar General also looks to relocate 100 stores and remodel 1,000 mature stores—500 of which will be in the DGTP format next year, said Vasos.

Vasos said the cooler expansion continues to be a focal point for Dollar General, particularly in mature stores. During this year’s third quarter, the company installed more than 20,000 cooler doors in these stores.

“The team has done a fantastic job increasing the average number of cooler doors across the chain, and we are seeing a great return on this investment,” he said. “Based on the success of this initiative, we anticipate continuing our cooler expansion efforts in 2019.”

In June, Dollar General launched DG Go, a mobile app that allows customers to scan items as they shop and skip the checkout line by using a kiosk. DG Go is now live in about 250 stores and has more than 20,000 monthly users, said Vasos.

The company also focused on increasing queues in its third quarter, expanding the concept to 7,500 stores in total. Vasos said Dollar General's queue performance exceeded expectations during the quarter, and the company will look to expand on the concept in 2019.

In the fall, Dollar General launched better-for-you food products in its stores due to consumer demand for healthier items at affordable prices. Today, the company has this selection in about 2,700 stores, including several under its Good & Smart private brand.  

“We are very pleased to be able to provide these product options to our customers at attractive price points that fit their budget,” said Vasos. “We believe that the better-for-you products appeal broadly to our customers and that we can roll out this offering to additional stores in 2019.”

Dollar General also focused on revamping its private brands during this year’s third quarter.

Besides the Good & Smart better-for-you foods, such efforts included the relaunch of its core health and beauty brands and studio selection, as well as a new advertising strategy for these brands. Vasos said the advertising campaign looks to compare proprietary brands to national brands, highlighting the former’s affordability and money-back guarantees.