| Retailing and Wholesaling 379

Chapter 13 | Retailing and Wholesaling 379

out-wrangle than in big-box stores. All that Real Marketing 13.1 adds up to a quick trip. The average Dollar

General customer is in and out of the store in

Dollar General: less than 10 minutes. Although Dollar General

is experimenting with larger format stores that

Today’s Hottest Retailing Format carry produce, meat, and baked goods, those

Super Dollar Generals are still much, much smaller and more manageable than a Walmart

“Save time. Save money. Every day.” Given to-

the likes of supermarkets, drugstores, and

supercenter.

day’s economics, that sounds like a winning

As for the “save money” part of the value proposition. In fact, it’s the slogan of discount

Walmart stores.” Dollar General now sells a

promise, Dollar General’s prices on the brand- retailer Dollar General—and it is a winning

carefully selected assortment of mostly brand-

name products it carries are an estimated proposition. “Dollar stores” and other hard dis-

name items. More than two-thirds of its sales

20–40 percent lower than grocery store prices counters are today’s hottest retailing format,

come from groceries and household goods.

and are roughly in line with those of the big- and Dollar General is the nation’s leading dol-

And it isn’t really a “dollar store” anymore.

name discount stores. There are also plenty of lar store.

Only 25 percent of its merchandise is now

savings to be had on dollar items and the in- Whereas the Walmarts, Costcos, and Tar-

priced at a dollar or less.

creasing selection of Dollar General private-label gets of the world are “big-box” discounters, Dol-

Dollar General’s “Save time. Save money.

merchandise. Finally, Dollar General gets a lar General and the other dollar stores are

Every day.” slogan isn’t just for show. It’s a

boost from customer perceptions of its dollar “small-box” discounters. They are still only a rel-

carefully crafted statement of the store’s value

store format. Even though only about 25 per- atively small threat to their bigger rivals; the com-

promise. The company sums up its positioning

cent of its goods are priced at $1 or less, almost bined annual sales of all dollar stores amount to

this way: “Our goal is to provide our cus-

anything in the store can be had for less than only about 15 percent of Walmart’s annual

tomers a better life, and we think our cus-

$10. That lends assurance that not only draws sales. But they are by far the fastest-growing

tomers are best served when we keep it real

customers in but also allows them to shop a lit- threat. In the recent down economy, as the big-

and keep it simple. We make shopping for

tle more freely than they would elsewhere. box discounters have struggled, the dollar

everyday needs simpler and hassle-free by of-

Keeping things simple for consumers also stores have spurted, rapidly adding new stores,

fering a carefully edited assortment of the

benefits the company’s bottom line. Smaller customers, and sales. “Nowhere in the retail

most popular brands at low everyday prices in

stores are less expensive to operate, and locat- world are we seeing more growth than from

small, convenient locations.”

ing them in smaller markets and less glam- the dollar store sector,” says a retailing analyst.

Dollar General saves customers time by

orous neighborhoods keeps real estate costs For example, Dollar General’s cash registers

keeping things simple. Its carefully edited prod-

down as well. Dollar General’s cost per square are really ringing these days. Over the past

uct assortment includes only about 12,000 core

items (compared with 47,000 items in an aver-

foot is as low as one-tenth that of supermar-

kets. Cheaper stores have also allowed Dollar $40 million to nearly $12 billion—an average

40 years, the retailer’s sales have grown from

age supermarket or 142,000 items in a Walmart

General to build more of them. In fact, Dollar growth rate of 14 percent a year. During the

supercenter). But Dollar General still stocks your

General now has more stores in the United past two years, even as the economy withered

favorite sizes and many of your favorite quality

States than any other discounter. and competitors’ sales suffered, Dollar General’s

brands, such as Coca-Cola, Bounty, Palmolive,

Hefty, Kraft, Folgers, and

same-store sales grew more than 9 percent each

Betty Crocker. Dollar General

year. The company now operates 8,800 stores in

has even added brands such

35 states, and it plans to open 600 new stores

as Hanes underwear, L’Oreal

this year and overhaul another 500. It plans

cosmetics, and Rexall vitamins

eventually to grow to more than 12,000 stores

and herbal supplements.

(about equivalent to the number of McDonald’s

Keeping it simple also

restaurants nationwide and more than 20 times

means smaller stores. Dollar

the number of Target stores).

General stores average

What’s the story behind Dollar General’s

about 7,100 square feet in

success? If you haven’t been in a dollar store

size—you could fit more

lately, you might be surprised at what you’d

than 25 Dollar General stores

find. Back in the day, dollar stores sold mostly

inside the average Walmart

odd-lot assortments of novelties, factory over-

supercenter. And most stores

runs, closeouts, and outdated merchandise—

are located in convenient

most priced at $1. Not anymore. “Dollar stores

strip malls. That means cus-

have come a long way, baby,” says another re-

tomers can usually park right

tailing analyst. “The Great Recession accelerated

in front of a store. Once inside,

the iconic American chains’ transformation

they encounter fewer aisles to

Discounter Dollar General, the nation’s largest small-box

from purveyors of kitschy $1 trinkets to dis-

navigate, fewer goods to con-

discount retailer, makes a powerful value promise for the

counters in a position to lure shoppers from

sider, and smaller crowds to

times: “Save time. Save money. Every day.”