With Dollar General reporting an outstanding second quarter performance, we look at how it is adjusting its operations to capture new growth opportunities.
Top line results
- Total sales up 24.4% to $8.7bn
- Same-store sales up 18.8%
- Net income increased 84.6% to $788m
- Same-store sales in the first weeks of Q3 running at around 15%
Four strategic priorities
The business had significant momentum ahead of the pandemic, as it pursued several strategic priorities.
Source: IGD Research
The COVID-19 opportunity
While these will underpin further growth and margin improvements through the second half of the year, COVID-19 has created additional opportunities, with several of its key programmes being accelerated:
- New customers - with the business experiencing growth in household penetration, many of its efforts are focused on retaining new customers that shopped with the business during the pandemic
- New items and pack formats – to maintain product supply during the crisis, the retailer introduced new items and pack sizes which have performed well. Some of these will be retained on-going
- Recession – the business expects to benefit as customers trade down from other retail channels as household budgets become more constrained. It believes its strategic programmes, including its fresh foods and non-consumable initiatives, will help it to gain a greater share of customer spend and lead to increase stickiness over the longer term
- Digital - accelerating its digital initiatives including store pickup and mobile self-checkout
- Property – additional store expansion opportunities will emerge as retail units will become available as some businesses exit their sectors
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