Dollar General plans to open 975 new stores and remodel over 1,000 stores in FY 2019 which begins in February. Part of their plan includes the incorporation of produce and expanded food selections into areas of which lack grocery options. The addition of produce and expanded grocery is an opportunity to offer a solution to a need especially in more rural and urban communities deemed as a “food desert”. A food desert is an area where residents within a 1-mile radius lack access to a full-service supermarket, of which includes the population of more than 23.5 million people in America. The newly remodeled stores with the incorporation of grocery offerings and coolers for perishable items are called Dollar General Traditional Plus and vary differently than their standard store format. The remodeled units incorporating grocery are seeing on average a 15% comp lift in sales. Dollar General continues to display strong performance with 8.7% year over year net sales growth and 2.8% year over year same store sales growth and continue to cater to a demographic in demand for low cost items.
Dollar General is a retailer that continues to morph and evolve to meet customer demands. With the incorporation of produce and additional grocery products within their new formats, Dollar General is capitalizing on a serious need of customers lacking options especially in food deserts. With over 15,000 brick and mortar locations throughout American communities, their extensive real estate portfolio allows this retailer to adjust and pivot to maximize business operations and best serve the customer and communities of which they operate in. Dollar General is a great tenant to a shopping center landlord and offers a diverse mix of products, appealing to the demands of middle-income households. They are well positioned to serve their customers with value and convenience, operating like a hybrid c-store, small format grocer and general merchandise store. The average unit size across their portfolio is approx. 9,100 sf, average sales per square foot of $186 and average unit sales of approx. $1,692,600. Great credit, strong growth and consistency across its operations makes this retailer a great tenant for a landlord to mix into their shopping center lineup.