AGB 2020.8 - Dollar General (DG)

Process Driven Consistency

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Dollar General

Dollar General is largest “dollar” retailer in the U.S. with over 16,000 stores. Though the name would suggest otherwise, Dollar General sells merchandise up to $10 in price in categories such as consumables, household products, apparel and seasonal non-consumable items. Because value is important for Dollar General’s customers, 75% of items offered in store are below $5 in price. Average basket sizes at checkout have historically been in the range of $10-$11 but have increased to $12 since Covid.

It may be helpful to compare Dollar General to its largest competitor in the “dollar” space, Dollar Tree. While there may be lots of overlap in the core customer, Dollar Tree offers most items close to the $1 price point and has a much higher non-consumable mix at 50% vs 75% for Dollar General. Consumables generally have lower gross margins than non-consumables. Dollar Tree leans more urban while Dollar General …