Dollar General targets higher income households with new store format

Date : 08 October 2020

Stewart Samuel

Program Director - Canada

America’s leading dollar store chain, Dollar General, is launching a new concept store, popshelf.

95% of range priced at $5 or less

The popshelf concept will debut in Nashville, Tennessee later this year, with two stores set to open in the city. It has been designed to create an engaging, fun environment, featuring on-trend seasonal and home décor, health and beauty must-haves, home cleaning supplies, party goods, and entertaining needs.

Source: Dollar General

Around 95% of the range will be priced at $5 or less. Commenting on the launch, Todd Vasos, Dollar General’s CEO, stated,

”We have leveraged robust consumer insights to create a unique store that we believe will resonate with new customers, while providing Dollar General with even more opportunities for growth in the years ahead.”

Source: Dollar General

The store format builds on the work Dollar General has been undertaking to improve its offer through its non-consumables initiative (NCI). The aim is to build a differentiated retail concept, with surprising deals in targeted non-consumable product categories.

Source: Dollar General

At 9,000 sq ft, popshelf will be focused on delivering a continually-refreshed merchandise, seasonal specials and limited-time items while staying true to the company’s value-based approach. The stores will also offer a curated assortment of Dollar General’s private brands.

Source: Dollar General

The retailer aims to have 30 stores trading by the end of fiscal year 2021, targeting suburban communities with a total household annual income ranging from $50,000 to $125,000.

Source: Dollar General

This new concept will provide the retailer with an additional route to growth, with the Dollar General network already extended to almost 17,000 locations. While the retailer continues to see opportunity for several thousand additional stores, popshelf will enable it to target higher income areas.

Comparisons will inevitable be drawn with Five Below. This is a fast-growing retailer in the dollar store segment that has built a differentiated concept. Many of the features of popshelf are similar; a focus on a fun and engaging experience, curated range and $5 or below price point. However, popshelf is aiming to serve a different customer segment, compared to the tweens and teens which Five Below appeals to. The concept images also point towards a very different look and feel, with cleaner lines more similar to Miniso and Home Goods. Target's non-food success will also have not gone unnoticed, especially as it has been achieved with a mainly private brand offer. 

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