Discount Non-food Retail Chain Dollar General (listed NYSE: DG) willl again bring significant store expansion for the new year as the discount retailer continues to rollout its DG Fresh food offerings along with other merchandising initiatives.
The discounter, in announcing its third quarter earnings, said that it plans to open 1,050 stores in 2021, remodel 1,750 stores and relocate 100. Dollar General operates roughly 17,000 stores in 46 states, employing approximately 140,000 associates.
“We are excited to once again accelerate our real estate growth plans in fiscal year 2021,” said Jeff Owen, Dollar General’s chief operating officer. “Our portfolio of high-return real estate projects continues to be a top priority for capital allocation as we look to continue delivering long-term shareholder value. With a robust pipeline in place and plans to execute an average of nearly eight real estate projects per day in fiscal year 2021.”
CEO Todd Vasos also highlighted other initiatives that promise to play big roles for the retailer in 2021. That includes the ongoing roll-out of its newest retail store concept Popshelf, with the retailer's signature bright-yellow branding nowhere to be found. The company opened the first two Popshelf stores in Nashville this fall. According to Dollar General, the new banner aims to engage customers with a fun, affordable and stress-free shopping experience where they can find on-trend seasonal and home décor, health and beauty must-haves, home cleaning supplies, party goods, entertaining needs, and more with approximately 95% of items priced at $5 or less.
“During the quarter, we also continued to make great progress advancing our key strategic initiatives, including the rollout of DG Pickup across nearly our entire store base, and the launch of our newest store format, Popshelf,” Vasos said. “In total, we executed 765 real estate projects, further laying and building the foundation for future growth. Overall, our ongoing operating priorities, coupled with our key strategic initiatives, position us well to continue delivering value and convenience for our customers, along with long-term sustainable growth and value for our shareholders.”
The expansion push also includes food.
"We are in the process of building, expanding or opening a number of distribution centers across our dry and DG Fresh networks. And while we expect these investments will enable us to drive even greater efficiencies going forward and further support future growth, these investments will pressure gross margin rates in Q4," said John Garratt, EVP and chief financial officer, during the post-earnings conference call with investors. The retailer also is building out other infrastructure related to food retail.
"During the first three quarters, we added approximately 49,000 cooler doors across our store base," said Jeff Owen, chief operating officer. "In total, we expect to install more than 60,000 cooler doors this year, the majority of which will be in our higher capacity coolers, creating additional opportunities to drive higher on-shelf availability and deliver an even wider product selection." He also talked about longer term DG Fresh planning.
"In addition, we recently began construction on our first ever ground up combination DG Fresh and dry distribution center in Blair, Nebraska," Owen said. "We anticipate this facility will be completed in early 2022 enabling us to drive even greater efficiencies as we move ahead. The team is also executing against additional opportunities to enhance gross mar