Dollar General Moves Toward Convenience

Dollar General has more big plans. But this time, the low-cost retailer’s big plans are to go a bit smaller.

In early 2017, Dollar General plans to open a smaller-concept convenience store in downtown Nashville, Tenn. If all goes well, the company hopes to build another location in Raleigh, N.C.

The store, reportedly named DGX, will take up a 3,400-square-foot floor space and will serve urban consumers looking for a quick and easy shopping experience.

The store will offer typical convenience store fare, including immediate-consumption items like soda fountains, coffee and prepackaged sandwiches. The store will also offer pet supplies, candies and snacks, cleaning supplies, a health and beauty section, limited fresh groceries, home electronics, and seasonal items.

This move is the latest in Dollar General’s plan to expand to 20,000 locations by 2020 and diversify its offerings. Dollar General currently operates over 12,000 stores in 43 states.

In June of this year, the company bought up 41 former Walmart Express stores in almost a dozen states. Taking advantage of the pre-existing produce amenities — crisping stations, cooling shelves, fridges and the like — Dollar General relocated stores to these larger spaces, called them Dollar General Plus and started selling produce. Dollar General has also experimented with more upscale retail offerings, called DG Markets.

Since then, the retailer has reported some disappointing quarterly sales — they had forecasted sales growth of 2.6 percent per share for the second quarter in 2016 but only saw growth of 0.7 percent.

The move toward smaller-scale, convenience store formats can be seen as an additional cost-cutting effort that also allows for continued expansion into Dollar General’s 20k-stores-by-2020 goal.