Dollar General has expanded its grocery offerings in recent years to become more of a one-stop shop. This strategy proved successful during the pandemic as grocery sales increased significantly. Dollar General saw a 28% revenue increase in its latest quarter driven by higher demand for groceries and essential items from customers shopping closer to home. It has remodeled many stores with coolers to offer more fresh and frozen foods and built out its own distribution network to supply groceries more cheaply and keep items in stock. As a result, Dollar General is capturing more spending from its rural and low-income customer base and gaining market share from competitors during this challenging economic time.

1. Article Assignment #1
Article Assignment-Dollar General
FORBES.COM
2,996 views |May 28, 2020,11:02am EDT
Dollar General’s Big Push To Sell More Groceries Is Paying Off
Lauren Debter
Forbes Staff
Dollar General has 16,000 locations in many rural and low-
income areas.
Business is booming at the nation’s largest dollar-store chain
and it is due in no small part to America’s growing appetite for
groceries under shutdown.
Revenue at Dollar General leapt 28% during its latest quarter as
the chain of 16,000 stores added more fresh and frozen food,
while driving down costs and undercutting competitors by
building out its own grocery distribution network. The moves
have made Dollar General a critical source of affordable
groceries and household staples, particularly in rural and low-
income communities.
“Grocery is really crucial to their business,” said Oppenheimer
analyst Rupesh Parikh in an interview. “They are a big
beneficiary in terms of what is happening during the pandemic.”
Dollar General has been working to fashion itself into a one-
stop shop that brings together the items typically found in a
drugstore, grocery store and big-box store, which has proven

2. savvy as consumers continue to stock up on essential items, like
groceries, cleaning products and pet food, which account for the
vast majority of its business. Rival Dollar Tree, which relies
more heavily on discretionary items like gifts, greeting cards
and party supplies, said sales rose just 8%.
“We are the most relevant we have been in many, many years,”
said Dollar General’s chief executive Todd Vasos on a call with
analysts and investors on Thursday, adding that people who
haven’t been to its stores recently would be “delighted to see all
the changes we’ve made.”
The sales jump was big enough for Dollar General to increase
profits nearly 70% to $650 million from the prior year,
offsetting $60 million in bonuses it paid during the quarter to
compensate employees for the extra risks the pandemic
presents. The jump comes as expanded cleaning efforts, risk pay
and reduced hours have squeezed margins across the industry.
Dollar General has become a rising threat to grocery stores as it
leverages its sprawling brick-and-mortar footprint and growing
distribution network to sell food at rock-bottom prices. It first
got into the grocery business in 2003, when it began selling a
small selection of perishable items like milk and lunch meat.
However, in recent years, it has stepped up its efforts to capture
a larger chunk of the $1 trillion that Americans spend to feed
their families every year.
Dollar stores, deemed essential retailers across the country,
were permitted to stay open during lockdown, sharing in the
shopping boom that has benefited larger retailers like Target
and Walmart. Grocery sales have been a bright spot for all of
them,
jumping 13% in April
as more people ate at home, according to the Census Bureau.

3. A recent
study
from the University of Nevada, Las Vegas found that produce
quality at dollar stores matched what you would find at regular
grocery stores after comparing the color, cleanliness, freshness
and firmness of fruits and vegetables. Over 80% of the produce
was also cheaper.
Dollar General benefits from a core set of customers
represented by the 19 million people in the U.S. who don’t live
within a mile of a supermarket, as well as an expanding
customer base. According to NPD Group, millennials from
households earning over $100,000 a year bring in a quarter of
sales at dollar stores. Dollar stores are also poised to grab more
market share during periods of economic hardship as budget-
conscious consumers look to make their money stretch further.
Forty million people — the equivalent of one in four workers —
have now filed for unemployment benefits.
“We do very good in good times. We do fabulous in bad times,”
said Vasos.
To make room for more refrigerated and frozen food, the
retailer has been installing coolers in the majority of its new
stores, as well as the thousands of stores it remodels each year.
The sales benefit has been swift. At its traditional stores that
have been remodeled with 22 coolers, it typically sees a 4 to 5%
rise in same-store sales. At its larger stores where there is room
for 34 higher-capacity coolers, there is a 10 to 15% rise in
same-store sales.
Dollar General also began building out its own distribution
network to shuttle groceries to stores in 2019. By cutting out
the middleman, it is able to cut costs and hang onto more
profits. It has also helped it keep items in stock during the
pandemic. The initiative, called DG Fresh, is currently

4. distributing groceries to more than 6,000 stores from five
facilities, with the goal of doubling that to 12,000 stores from
ten facilities by the end of 2020. That should help drive margins
higher starting this year, the company says.
It will also sell fruits and vegetables in 1,000 stores by the end
of the year. While it will not offer the selection at a typical
grocery store, it comes close, promising to carry 80% of
produce categories.
Instructions:
Please read the article and answer the following question.
Present the one-page report in an essay format.
How has Dollar General answered the need of consumers?
What are they doing differently in their stores?
Why is it important for a business to be aware of the changes in
the economic environment?
Do you think Dollar General is taking advantage of a situation
or are they are trying to be helpful?
Please share any thoughts that you may have about the changes
that Dollar General is implementing.
Please present your findings in a
research paper format
that will be uploaded to Moodle by
12:00 PM
on
June 4, 2020.

5. Do not email any assignments as they will not be accepted.
Guidelines for Research Papers
Word-processed
Min 500 – Max 750 words in length (approx. 1.5 Pages)
Double spaced
One- inch margins
Font-Times New Roman
Size- 12