Shopping carts are not usually part of the bare bones business of shopping at one of America’s small dollar stores, with their minimal staffing levels and super low overheads. So the yellow and black trolleys outside the Dollar General store in Saddle Brook, New Jersey, are a sign of change – as are the automatic sliding doors, installed to make life easier for elderly customers.
The store, opened last year, is one of 500 in the chain’s 9,000 stores in 35 US states that reflect a range of design and merchandising changes carried out by the management put in place after the chain was taken private in 2007 by Kohlberg Kravis Roberts.
Inside, the food in its expanded grocery section includes both leading national brands, and redesigned packaging for its Clover Valley private label foods. Small codes on each aisle reflect the planograms – visual diagrams used in retail to plan where every product should be placed – introduced to create more consistency and analysis of sales performance. The health and beauty section includes L’Oréal brand beauty products, introduced this year, and other more premium items.
Rick Dreiling, chief executive of Dollar General, says the overhaul of the chain – planned before the recession – ended up coinciding with increased visits from more affluent customers as the recession deepened, as part of the “trading down” phenomenon. “The radical change in the economic environment meant people came into Dollar General, and they go, ‘Oh my! That’s not the Dollar General I remember’,” he said.
Tony Nieves, manager of the store, says it has been bringing in a wide range of customers since it opened in September 2009, with income far above the $45,000 of a typical Dollar General customer. “You see it in the parking lot: the Mercedes, the BMWs, the Hummers – we are bringing in new people,” he says.
Dollar General’s stores typically cover about 7,200 sq ft, compared with traditional US supermarkets of about 45,000 sq ft, or an average Walmart Supercenter of 185,000 sq ft. Already able to claim to have more locations than almost any US retailer – more than the 8,046 of Walgreens, the largest US drugstore chain by sales – it argues there is room for growth. Another 8,000 potential store sites have been identified in states where it has a presence and about 4,000 in states where it does not have a presence.
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