Consumers are feeling the effects of inflation, and discount retailer Dollar General Corp. doesn’t see that changing anytime soon. And the CEO believes that the discount channel is better positioned than convenience stores to provide those consumers with the value they need.
“Our customers continue to report that their financial situation has worsened over the last year as they have been negatively impacted by ongoing inflation. Many of our customers report that they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities. As we enter 2025, we are not anticipating improvement in the macro environment, particularly for our core customer,” Dollar General CEO Todd Vasos said on the discount retailer’s fourth-quarter fiscal 2024 earnings call last week.
“We know our customers expect value and convenience more than ever. We are committed to providing the value they need and continue to feel very good about our everyday low-price position relative to competitors and other classes of trade,” he said.
Concerning the effect of tariff’s, Vasos said, “We believe we are well-positioned to mitigate the impact in 2025. We were able to successfully mitigate the tariff impact in 2018 and 2019, though we did take retail price increases in some instances along with others across the industry. Given the already stressed financial condition of our core customer, we are closely monitoring these and any other potential economic headwinds, including any changes to government entitlement programs. Importantly, we remain focused on doing everything we can to deliver the value our customers want and need.”
Fourth-Quarter Financials
The Goodlettsville, Tennessee-based company reported net income of $191.2 million for fourth-quarter fiscal 2024, a decrease of 52.4% compared to $401.8 million in fourth-quarter fiscal 2023.
Fiscal 2024 net sales increased 5.0% to $40.6 billion—for the first time ever—compared to $38.7 billion in fiscal 2023, the company said. The net sales increase was primarily driven by positive sales contributions from new stores and growth in same-store sales, partially offset by the effect of store closures.
“This is a testament to the essential role Dollar General Corp. serves as America’s neighborhood general store in more than 20,000 communities across the country. We are here for what matters for the customers every day, and the relevance of our value and convenience offering is clear,” Vasos said.
Same-store sales increased 1.4% compared to fiscal 2023, reflecting increases of 1.1% in customer traffic and 0.3% in average transaction amount. Same-store sales in fiscal 2024 included growth in the consumables category, partially offset by declines in each of the home products, seasonal, and apparel categories.
Store Closures
During fourth-quarter fiscal 2024, Dollar General Corp. initiated a store portfolio optimization review that identified 96 Dollar General stores and 45 pOpshelf stores for closure based on an evaluation of individual store performance, expected future performance and operating conditions, among other factors.
The discount retailer also plans to convert an additional six pOpshelf stores to the Dollar General brand by the end of January 2026. pOpshelf is a discount concept offering nonconsumable items such as seasonal and home decor, health and beauty, home cleaning supplies, party goods and entertaining needs.
“We believe this review was appropriate to further strengthen the foundation of our business,” said Vasos. “While the number of closings represents less than 1% of our overall store base, we believe this decision better positions us to serve our customers and communities.”
The stores slated for closure are mostly in “urban and metro settings” with leases set to expire, Vasos said on the company’s earnings call. “These stores … have become increasingly challenging to successfully operate,” he said.
The retailer plans on opening 575 stores this year and believes there is room for as many as 12,000 more U.S. locations. “While we won’t capture all those, we still believe there’s a lot of runway for growth within the continental United States,” said Vasos.
Double DoorDash
Meanwhile, in a move also intended to benefit lower-income consumers, Dollar General has partnered with e-commerce platform DoorDash for more than 16,000 Dollar General stores across 48 states to accept Supplemental Nutrition Assistance Program/Electronic Benefits Transfer (SNAP/EBT) payments on the DoorDash Marketplace. With the addition of Dollar General, San Francisco-based DoorDash’s network of stores that accept SNAP/EBT online payments on the DoorDash Marketplace nearly doubles to more than 35,000.
“Unlocking the ability for SNAP/EBT recipients to shop online and have groceries delivered straight to their door through DoorDash provides even more accessibility and convenience,” said Tony Rogers, senior vice president and chief marketing officer at Dollar General. “With approximately 75% of the U.S. located within five miles of a DG store, we are proud to bridge gaps to serve the communities we call home.”
As of Jan. 31, 2025, the company has 20,594 Dollar General, DG Market, DGX and pOpshelf stores across the United States and Mi Súper Dollar General stores in Mexico.
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