How the COVID-19 pandemic has created new opportunities for Dollar General

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 31 August 2020

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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