A General-Store Race Is On: $ General's Move to Add Fresh Food Underscores Midsize Store Rivalries

The Wall Street Journal ^ | April 29, 2012 | Ann Zimmerman

[2ndDivisionVet]

MERCED, Calif.—Dollar General Inc., whose discount stores have stolen bargain-seeking shoppers from Wal-Mart Stores Inc., is trying to grab a share of the grocery business.

The idea behind entering the notoriously low margin business? That stocking fresh food and more refrigerated products in midsize stores will drive shoppers to visit more frequently—and increase how much they spend on standard dollar-store fare, from corn chips to children's clothing.

So far, Dollar General Market stores aren't nearly as profitable as the company's traditional dollar stores, which now number 10,000, though the company says the profit gap is narrowing.

Competition is heating up in the midsize store category. Many big-box retailers, including Target Inc. and Wal-Mart, have their own small-store strategies. And every drugstore, it seems, has added packaged food, cleaning supplies and dog biscuits, in an attempt to pry more money from customers.

It is a race to become what Dollar General's CEO, Rick Dreiling, calls "the new general store"—a place where harried, frugal shoppers can get the most essential things they need at a discount without traipsing through airplane-hangar-sized supercenters, which top 150,000 square feet.

At 16,000 square feet, the markets are far smaller—but still about twice the size of a typical dollar store. Over the next year, Dollar General plans to open about 40 of the Markets, many in "food deserts"—neighborhoods that lack easy access to fresh food....

[JRandomFreeper]

And back around we come. Next thing you know, Western Auto will be branding a cheap .22 rifle that every kid has to have.

So... Is this suit back in style yet? (preens baby blue polyester wide lapels.... while wearing white shoes)

/johnny

[SunkenCiv]

Thanks 2ndDivisionVet.

Dollar General Inc., whose discount stores have stolen bargain-seeking shoppers from Wal-Mart Stores Inc., is trying to grab a share of the grocery business.

I've tried a couple DGs, both sucked, they were cluttered, dirty-looking, and have subsequently closed (one was on S Division, the other on Plainfield). All it takes to turn a company around is a ramrod at the top with enough support from the board (and every board has a nitpicker or two, and a meddler or two) and sufficient capital to effect the transformation.

The other chain like this one is Family Dollar, and they've been in an expansion frenzy around here. I just spotted another new one this afternoon.

Dollar Tree has also been on a tear, but I should point out that Michigan's economy has sucked since Granholm took office.

When Dollar General adds groceries, it'll find that both Dollar Tree and Family Dollar have already done this, and the cash-only grocery chains Aldi and Save a Lot do a great job, and cover the lower-income neighborhoods very well. Up on Leonard between Plymouth and Ball there's a strip mall with a Family Dollar, Save A Lot, and Dollar Tree, also an Admiral Tobacco.

[WilliamofCarmichael]

Since you have to pay to read the linked article here's one that's free. I guess it's the same thing.

My favorite is 99-Cents Only stores. Dollar General will have to be really good to beat 99-Cents Only stores.

[markman46]

99cent stores have been stocking fresh fruit and veggies and have coolers for a long time now

[Dan Nunn]

FYI, for WSJ articles: copy and paste the headline into Google, and the first result is usually your article. Click the result and you’re taken to the full article on the WSJ page.

They want the search traffic but not any other traffic unless you’re paying for it, I guess.

[Figment]

Dollar General fills a niche where I live. It’s a food desert. Closest grocery stores are 8-10 miles away. They sell all but fresh produce, business is booming

[PAR35]

I don’t hit the Dollar General very often, although it is closer than Aldi or WalMart - I usually don’t think of it. But when I do go, they usually have what I’m looking for, it is cheap, and I’m in and out quickly.

But as noted up thread, it is old and dirty looking.

[WilliamofCarmichael]

Thanks for the tip.

[TribalPrincess2U]

DG-the store for people looking for junk/crap from who knows where.

Since I’m in a bitchin’ mood...

Wally’s foods are becoming pricier every day. They still have a few items like dog/cat food that works.

At least they haven’t marked their clothes sky high, then say they’re on sale and you’re saving, saving, saving...like Kohls.... yet.

Series, some clothes at Kohls has a price tag of $40.00 but it’s on sale for $20.00, so you saved $20.00 for a cheap looking blouse that was worth $5.00 to begin with. But somehow they make you think you got a bargain and they will tell you that at the checkout.

[Figment]

That sounds like what Dollar General was like here 3 or 4 years ago. Stores have completely changed for the better. Clean, neat and well stocked is the norm here

[WilliamofCarmichael]

I must have missed the mention of prices in the posted article. It's a one dollar for everything?

99-Cents Only stores everything for $0.9999 or less, They raised the price by .99 of a penny the last time oil prices got out of control.

(Some individual stores may sell an item or two for more than $0.9999. For example a gallon of milk for $3.00 or so.)

They do not have everything I like of course. They do have regular quantities of the name brand romaine mixed salad I like plus a wide variety of other packaged vegetables as well as literally tons of fresh fruits and vegetables.

From time-to-time they will have name-brand frozen and canned goods that I like. Fresh bakery goods also but I no longer use bread.

.. next door is a popular major super market in northern California and there is definitely an impact on the prices it charges. In some cases they are actually cheaper than 99-Cents Only.

These days the 99-Cents Only stores are packed and IMO serve as a excellent alternative to needing food stamps to pay super market prices.

[Venturer]

I like Dollar Tree. Everything there is a dollar.

Even so you have to watch what you buy as some thing s they charge a dollar you can get for 65 cents elsewhere.

The Bread there is a buck some other food items they have are cheap and others are competitive. mostly I watch what I buy.

[reformedliberal]

Search your area for a really good consignment shop. I have a fave about 45 miles away with major sales in June/July and January/February. Worth the 2x/year special trip. I go w/a friend to split the gas and we combine it with a major food shopping trip that includes Aldis. Last February I bought my husband 3 wonderful sweaters, 2 of them heavy cotton Izods, for a grand total of $40. He is very hard on his clothing. They are wearing much better than anything from Walmart and they look great on him. He needs to dress decently for work and I was practically jumping up and down when I found them.

I am with you on the merchandising tactics of the low end chains. We only buy clothes at WM on major markdown and for general work/schlep purposes. I am in ShopKo fairly often for an item I use in my business that is cheapest there. It is usually nearly empty and they also do the “regular price $50/on sale for $20” (but worth $5) thing.

We have a local gas station/convenience store chain here that has regular low prices on potatoes, onions, bananas, bread, milk, butter and (some)produce. I do wish we had an Aldi that was closer. You really have to check the best by dates at DG and be aware that often they *beat* WM by $0.01. They also seem to specialize in extra small packaging.

[SunkenCiv]

Thanks!

[madison10]

Have you BEEN in a DG or are you making an assumption? Many of their products are name brand. Who wants to walk all over a big box store to find the one product he/she is looking for?

[TribalPrincess2U]

Yes I have. My sister-in-law is a manager in one.

[Marcella]

Thanks for this post - I keep forgetting the two dollar type stores very near me. This is a nice neighborhood and stores are clean. I don’t remember the names of these stores, think one is Dollar Tree. I go there for Christmas bags every year but I need to go there for other things - like cheap soap to store.

I don’t know if they have food - I’ll check both stores this week.

[smalltownslick]

Family Dollar is MUCH better than Dollar General. It’s brighter, cleaner, nicer merchandise, while Dollar General just seems “trashy.”

[Will88]

The Dollar Generals I sometimes shop at are not at all trashy and are both relatively new. And they carry many major brands as well as some DG brand, cheaper goods.

The one negative comment I’d make is that they are doing so well that they are constantly making the selves higher and narrowing the aisles, and some items have been relocated once or twice, or even more. Some of their stores were simply built too small for the business they soon developed.

They do especially well in smaller towns that do not have WalMarts or other major chains.