| 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.”