Dollar General remains one of the fastest-growing retailers in America, attracting customers with rock-bottom prices on snacks and household goods. It’s so confident in that strategy that it plans to open 1,000 new stores in 2020, just as it has for the past several years.
Dollar General currently has more than 16,000 stores in the United States and caters mainly to low-and-middle-income customers in rural and suburban areas, while its rival, Dollar Tree (DLTR), targets suburban, middle-income shoppers.
Despite the strengthened US economy in recent years, dollar stores’ popularity has endured. Wages for a vast number of Americans have grown only modestly.Americans living paycheck-to-paycheck have been a boon to Dollar General, and wages for a vast number of them have grown only modestly. The chains have also reached higher-income shoppers seeking discounts.
Dollar General’s core customers make around $40,000 a year.
“We see her about where we have the last couple of quarters,” Dollar General chief executive Todd Vasos said on a call with analysts Thursday. “She still has a little bit of extra money in her pocket, continues to be employed at a pretty high rate. But, always remember, our core customer is always a little stretched.”
Dollar Tree CEO Gary Philbin added last week that low-income consumers are often “one doctor bill or one car repair bill away from not being in such good shape.”
By opening 1,000 new stores next year, Dollar General’s growth is nearly unrivaled in the industry at a time in which many brick-and-mortar retailers are closing stores or folding.
