Business

Dollar General to open 1,000 Popshelf stores targeting wealthier shoppers

Popshelf stores are approximately 9,000 square feet and sell home furnishings, seasonal décor and party supplies, including private Dollar General brands.

Dollar general

About a year ago, Dollar General introduced a new store called Popshelf, aimed at wealthier suburban shoppers who love to hunt at a bargain price.

The Tennessee-based discounter said Thursday that it plans to open about 1,000 stores by the end of fiscal 2025, including about 100 more that will open in the next fiscal year. As of October 29, she had 30 Popshelf stores in six states. The first stores are slated to open in Texas in early spring.

News of the ambitious expansion plan comes when the retailer said it will test its first international market, opening 10 stores in Mexico by the end of fiscal 2022. Dollar General said it expects 1,110 new stores to open in the coming fiscal year, including Popshelf, Dollar. General and international locations.

But the stock fell more than 1% early Thursday after the company said it expects similar store sales to decline this fiscal year.

Dollar General Sales Director Emily Taylor said in an interview that the retailer is accelerating plans to expand the new store concept due to its popularity with shoppers. She said its average basket size and cost is higher than Dollar General stores of the same name, although she declined to give numbers.

For the dollar store chain Popshelf, it’s a way to attract new customers and increase profits. According to the company, its target customers are women who live in suburban areas and have an annual household income of between $ 50,000 and $ 125,000. The approximately 9,000-square-foot stores sell merchandise such as home furnishings, seasonal décor and party supplies, including private-label Dollar General. More than 90% of the products Popshelf sells are worth $ 5 or less, the company says.

Dollar General’s customers tend to live in rural areas, are on a tight budget, and are slightly older, Taylor said. His clients have an annual household income of US $ 40,000 or less. Dollar store sales also include a tighter mix of grocery and snack items, which tend to be less lucrative for the retailer.

Dollar General has over 18,000 stores in 46 states. To drive growth, the retailer quickly opened additional locations. It is also expanding its stores with fresh fruit and vegetables and expanding its health care activities. In July, he hired his first chief physician.

Taylor said the idea for the Popshelf was born when Dollar General was working on its Nonexual Goods Initiative, a corporate-wide effort to expand its store’s range to include more items such as home decor and holiday paraphernalia, which began in 2018. She said the company saw another store open.

“We realized that there are many benefits to a stand-alone concept, especially when it comes to providing truly exciting, joyful and fun small store shopping,” she said.

This inspired Popshelf to focus on colorful display cases and frequent product changes to make shopping feel like a treasure hunt, whether shoppers are looking for a gift, preparing for a party or decorating for the holidays, she said.

Depending on the season, the assortment includes toys, throw pillows, Christmas decorations, pumpkin-shaped disposable paper plates, balloons, bath bombs, and specialty foods such as hot cocoa and cold cuts cheeses.

According to Taylor, the popular category was, in particular, household goods, including decorative items and organizational items.

She said Popshelf stores offer shoppers the ability to shop online and pick up at the store. She said the company will likely also start delivering purchases to customers’ homes so that people who don’t live near the Popshelf store can shop for groceries. According to her, there have been many inquiries about this on social networks.

The company is also testing a store-in-store format. He opened 14 smaller versions of Popshelf inside DG Markets, the Dollar General format which is bigger and has a wider selection of products, and he will add more.

Looking for growth, coping with inflation

Dollar General is trying to spur growth – and attract buyers with large disposable income – as it braces for a slowdown in sales and tackles inflation. As his thrifty customers face higher prices at gas stations and grocery stores, they are cutting back on the money they can spend at dollar stores. Compared to other retailers, the discounter also has fewer opportunities to raise prices due to its reputation and the risk of scaring off shoppers.

Its main competitor, Dollar Tree took a big step last week by announcing that it will cover the additional costs for buyers. It will start selling most of its merchandise at $ 1.25, rather than $ 1, to help cover rising shipping costs.

Dollar General said Thursday it expects similar store sales to decline 2.5% to 3% this fiscal year. In two years, this means an increase of 13% to 14%, taking into account the jump in sales during the pandemic.

EPS is expected to be in the $ 9.90 to $ 10.20 range for the year, slightly higher than his previous expectations of $ 9.60 to $ 10.20.

In the third fiscal quarter ending October 29, which the retailer reported on Thursday, earnings exceeded analysts’ expectations.

The company earned $ 2.08 a share on $ 8.52 billion in revenue. On average, analysts expected Dollar General to generate $ 2.01 per share on $ 8.50 billion in revenue, according to Refinitiv.

But net income of $ 487.03 million was lower than a year ago, when the company earned $ 574.26 million, or $ 2.31 per share.

As of the end of Wednesday, Dollar General shares were up nearly 6% this year. The stock closed at $ 222.79 Wednesday, bringing its market value to $ 51.98 billion.


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