dollar general produce expansion

Dollar General plans to carry fresh produce in about 450 stores by the end of 2018.

The retailer expects to remodel 1,000 stores this year, and about 400 of those locations will be the Dollar General Traditional Plus format.

“These remodels incorporate a cooler set of 34 doors for increase perishable selection,” CEO Todd Vasos said in a quarterly earnings call March 15. “Our cooler door expansion has proven to drive baskets and trips with our existing customer base while also attracting new customers with an expanded offering.”

About a third of the remodels to the Dollar General Traditional Plus format will have an assortment of fresh produce, bringing the total number of Dollar General stores with produce to 450. It is a tiny percentage given the retailer operates more than 14,000 stores, but Dollar General has been encouraged by the progress.

“While it’s still early, prior-year Traditional Plus remodels are yielding strong same-store sales results,” Vasos said. “The ability to offer produce, particularly in areas with limited grocery availability, represents an attractive growth opportunity for Dollar General in the years ahead.”

Between all its formats, Dollar General opened 1,315 stores in 2017, remodeled or relocated 764 stores and closed 35 stores it described as underperforming.

For 2018, the retailer plans to open 900 stores and remodel or relocate about 1,100.

“We will also continue to strategically invest in our mature store base,” Vasos said on the call. “We are particularly focused on remodeling stores that have fewer than 12 cooler doors, which in relative terms are expected to drive the highest returns upon remodel. By the end of fiscal 2018, we anticipate that across our store base we’ll have an average of 20 cooler doors, up from 10 in 2012. In total, we expect to install over 20,000 additional cooler doors across our mature store base this year.”

Same-store sales for Dollar General in fiscal year 2017 were up 2.7% from the previous year, according to a news release. Net sales were up 6.8% to $23.5 billion.

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