During the company’s first quarter earnings call held June 1, Goodlettsville, Tenn.-based Dollar General executives said they’re encouraged by efforts to add fresh produce to store remodels.
CEO Todd Vasos said during the call that the company is adding fresh produce to about a third of the traditional store remodels in progress.
“The remodels include increasing the cooler set to 34 doors, an increase of about 160% on average from the existing cooler footprint for those locations,” he said. “This allows for a greater perishable assortment which helps drive trips and basket size.”
“Additionally, across about a third of these locations, we are testing an assortment of fresh produce,” he said. “While it’s still very early, initial remodels are yielding strong same-store sales improvements.”
Vasos later elaborated that those same-store sales improvements are roughly three times those in traditional remodels without produce.
“When you look at stores that we put produce -- and again, just keep in mind, it’s a very few stores – we have seen nice comp lifts in these stores,” he said. “Produce is helping that comp, but even without that those stores are comping very, very well.”
While Dollar General has established fresh produce divisions in its Dollar General Market stores, the vast majority of the company’s 13,600 stores do not offer it.
“We’re pretty excited about what we see there, but there’s still a lot more yet to figure out on these new stores as it relates to produce,” Vasos said, during the call. “As you know, we’ve been in the produce business for only a short period of time in these stores, but we’ve got a lot of experience with them in our market stores, and we’ve taken the learnings from those and are applying them here.”
The company is on track to add 1,290 new stores in 2017, having opened 293 in the first quarter, ending May 5. Dollar General reported $5.61 billion in sales in the first quarter, a 6.5% increase in net sales, and 0.7% increase in same store sales