Dollar General Corp. says it is “not a grocer.” In its latest “food-first” private-label expansion, however, the discount chain is acting very much like one, or perhaps even more like a convenience store in bringing food and everyday essentials to the rural communities it targets for its stores.
Food and beverages already account for 80% of Dollar General’s sales, and the company on Tuesday said it’s looking to bring that number even higher with a 100-item expansion of its Clover Valley private-label brand.
Clover Valley, which Dollar General introduced in 2009 and now includes about 600 products, has been stretched to sell more sauces, condiments, entrees, sides and snacks such as Lobster Bites, Crab Cakes, Siracha Chili Sauce, 100% Whole Wheat Sandwich Bread and Peanut Butter Spread with Honey. Other new products are Mild Buffalo and Medium Wing Sauces; Mandarin Orange or General Tso’s Chicken Bites with Rice; Black Bean & Corn Salsa; and Dill Pickle or Ranch Sunflower Seeds.
“When Dollar General pioneered the ‘dollar store’ format in 1955, few food products were offered,” Jackie Li, senior vice president of private brands and global sourcing, said. “With continual growth and changes to the company’s business model, our product selection has evolved. Customers shared that they believe in the quality and equity of Clover Valley and were receptive to more innovative products.”
Li added: “We have put ‘food first’ this year because we see a need and to fulfill the desire for even more options.”
Dollar General, in its announcement Tuesday, noted that it is “not a grocer” but said about 80% of its stores operate in communities of 20,000 or fewer people, with many relying on the retailer for everyday household essentials.
The discounter is investing heavily in grocery, too, with plans to install more than 65,000 cooler doors this year as part of its DG Fresh initiative. At the end of the first quarter, Dollar General sold fresh produce in nearly 3,900 stores and is slated to expand that to more than 5,000 locations by January. Dollar General said this would give the company “more individual points of produce distribution than any other U.S. mass retailer or grocer.”
Goodlettsville, Tennessee-based Dollar General, however, told Wall Street analysts last month that sales of consumables are far outpacing those of discretionary goods, cutting into its profits. Also, the reduction in Supplemental Nutrition Assistance Program (SNAP) or ‘food stamps’ benefits that began on March 1 has significantly affected Dollar General shoppers, the retailer’s executives noted, forcing them to cut back on spending even more than expected.
Industry-wide, private-label brands have continued their sales growth, even as inflation cools.
Dollar sales of store brands jumped 8.2% during the first half of 2023, outpacing national brand sales gains of 5.1% during the period ended June 18, according to data released earlier this month by research firm Circana. On a two-year basis, private-label sales soared 16%, or about $17 billion. Store-brand dollar share during the period rose to a record 18.8% and unit share also set a record, at 20.5%.
“We have made significant enhancements to our private brands in 2023 and we know how important these value offerings are for our customers,” Emily Taylor, Dollar General executive vice president and chief merchandising officer, said. “We believe these products will further differentiate Dollar General in the marketplace as we look to provide our customers with tremendous value on quality products.”
Founded in 1939, Dollar General Corp., as of May 5, 2023, operates 19,294 Dollar General, DG Market, DGX and pOpshelf stores across the United States and Mi Súper Dollar General stores in Mexico.
A version of this story first appeared inWinsight Grocery Business.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.