Another 45 Dollar General stores added fresh produce during the first quarter of 2018, bringing the company’s total, excluding Dollar General Market formats, to 200 with the enhanced offerings.
The Goodlettsville, Tenn.-based discounter reported $6.1 billion in net sales during the quarter, with same-store sales up 2.1%.
CEO Todd Vasos said during the company’s quarterly financial earnings report produce is a definite draw for remodels.
Of the 900 new stores and 1,000 store remodels the company plans in 2018, about 400 of them will be a Dollar General Traditional Plus (DGTP) format, with more cooler space for perishables. About 1/3 of the DGTP stores get produce departments on average, Vasos said.
“As a reminder, our remodel store delivers a 4% to 5% comp lift on average, and a DGTP remodel delivers an average of 10% to 15% comp lift,” he said, during the call.
Adding produce hasn’t caused too many growing pains, Vasos said.
“We feel good about where we are,” he said. “We’ve got a lot of track record because of our market stores, for many years on how to treat produce within our stores, but we’re still learning in our smaller store formats.”
In the hard discount sector, fresh produce gives Dollar General an edge, he said.
“We see it as a competitive advantage, especially in rural areas where there isn’t a lot of competition and/or food choices, especially healthy food choices for our core consumers,” he said. “So, we see it as a real opportunity and an advantage to deliver something to our core customer that they’re looking for.”
Stores with fresh produce are a tiny portion of Dollar General’s overall footprint. The company currently operates more than 16,000 locations in 45 states.
Fresh produce is available in fewer than 500 stores.
“We’ll continue to learn and grow,” Vasos said. “I would tell you it’s not going to be for every store somewhere down the line, but could it be for thousands – eventually? Yes, it could.”