November 19, 2003

Dollar General to open 675 units next year

Amid rapid growth among dollar stores, Dollar General, the sectors biggest chain, says it will open 675 stores over its next fiscal year.

Dollar General has maintained a similar pace of expansion this year. The Goodlettsville, Tenn.based chain is on track to open 660 stores this fiscal year and now has 6,653 units in 27 states. Next year it will enter three states for the first time: Arizona, New Mexico and Wisconsin. The company also says it expects to pursue similar growth in 2005 and 2006.

Deep-discount stores, which sell items generally priced at no more than $10, are among the retail industrys fastest-growing and best-performing. The sectors top 10 chains opened nearly 1,800 units last year, bringing their combined units to at least 16,000, according to a report by consulting firm Retail Forward. The two largest chains after Dollar General are Family Dollar (with 5,066 stores) and Dollar Tree (2,511 stores).

Last year the leading names, not including one-price chains, posted same-store sales increases of 6.3 percent on average, to outperform conventional discount stores and supercenters, which saw only a 2.8 percent average same-store sales increase, Retail Forward reports.

Dollar-store chains, which originated in southern states and have targeted shoppers with average yearly household income of $30,000, have begun to expand West and North as they attract a wealthier consumer demographic.

In recent years Dollar General has included more food items in some of its stores. Those stores generate an average ticket of $13.41, compared with $8.42 in its others. Dollar General says it plans to open more such units, but did not specify how many.

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Posted by Craig at November 19, 2003 06:30 PM