Dollar General Bucks Trend By Adding Jobs, Stores
Amid the dreary news about retailers closing stores and cutting staff (even Walmart has gotten into the act recently, cutting more than 11,000 staffers at its Sam’s Club unit) it was heartening to see one retailer announce that it plans to add 5,000 jobs to its payroll as it opens 600 new stores this year. In making its aggressive push, Dollar General looks to continue riding the popularity wave that dollar stores benefited from when the economy tanked in 2008. Stores like Dollar General and Family Dollar have served their core customer base well and managed to pick up market share from higher-income shoppers who traded down during the recession.
But, the recession is, technically, over and sales are picking up at department stores as middle-class and affluent shoppers let go of more discretionary dollars. Yet, consumers are still cautious and not entirely convinced that a significant economic recovery is around the corner, so there is continued opportunity for low-priced outlets. Dollar General is making a strong effort to solidify past gains and create new avenues for growth with its expansion plans. But, if it is to maintain long term growth, it will have to continue to identify with the new customers it picked up during the recession by providing merchandise they want while still appealing to its core low-income constituents. Not, a simple task, but one that can be accomplished if it can move from being simply a low-cost alternative to a format that offers shoppers real merchandise value. It has created a shopping habit for an increased number of consumers amid the downturn. The trick will be to reinforce this habit, or its expansion plans will lose steam. That said, Dollar General managed to grow significantly before the recession hit and will continue when the recovery picks up.
Labels: Dollar General, Economic Recovery, Family Dollar, Recession, Retailers Closing Stores, Sam's Club, Walmart