Dollar General will be rolling out a new prototype for all its stores in 2016 with attention on speedier checkouts and a greater focus on perishables and health & beauty.
On the company's second-quarter conference call last week, CEO Todd Vasos said the prototype will strive for a more customer friendly shopping experience.
"The consumer will be able to and have faster, more convenient checkout, an attribute that is a high priority for our core consumer," said Mr. Vasos. "We have value engineered the design to be capital efficient and easier to operate for our store teams."
A second focus will be on expanding cooler penetration across store bases to emphasize perishables and help moms find quick meal solutions or fill-in items. Dollar General has found a basket with a perishable item is nearly 50 percent higher than the chain average. The CEO told analysts, "This is a big opportunity that we know how to capitalize on, as we have already increased the cooler count on average by just over 50 percent since 2008."
Photo: Dollar General
According to Dollar General's financial documents, consumables overall reached 75.7 percent of revenues last year, up from 63 percent in 2004.
Finally, Mr. Vasos, who replaced longtime CEO Rick Dreiling in June, noted that more consumers are coming to Dollar General for their health and beauty needs. Based on the company's customer insights, offerings will be expanded across segments such as hair care, cough & cold, over-the-counter medicines, skin care and nail care. Mr. Vasos added, "We are well positioned to capitalize on this trend given our brand offerings and price relevancy. Our ongoing affordability initiative will be front and center with the new fresh approach."
Dollar General reported a solid second quarter with earnings rising 12.3 percent on a 2.8 percent comparable-store increase. Profits topped expectations but sales fell short, in part due to rainy conditions earlier in the quarter in Texas and Oklahoma.
On the investor call, the company said the chain continues to benefit from consumers trading down to Dollar General while its core low-income consumer, while bolstered by the better job market and low gas prices, remains somewhat cautious. Said Mr. Vasos, "It takes her a little longer to start spending because she has to feel confident that what she's seen is sustainable in her budget."