Greenback Basic to open 1,000 Popshelf shops, geared toward wealthier customers

Popshelf stores are approximately 9,000 square feet and stock items such as housewares, seasonal decorations, and party supplies, including Dollar General’s own brand items.

Dollar general

Dollar general debuted a new store called Popshelf about a year ago, is aimed at wealthier suburban shoppers looking for good deal.

The Tennessee-based discounter announced on Thursday that it plans to have around 1,000 of its stores by the end of fiscal year 2025 – including around 100 other locations that will open in the next fiscal year. It has 30 popshelf stores in six states (as of October 29). It plans to open its first stores in Texas in early spring.

News of the ambitious expansion plan comes when the retailer said it will test its first international market by opening 10 stores in Mexico by the end of fiscal 2022. Dollar General expects 1,110 new stores to open in the coming fiscal year, including Popshelf, Dollar General and the international locations.

But shares fell more than 1% early Thursday after the company announced that sales in the same store will decline this fiscal year.

Emily Taylor, Dollar General’s chief merchandising officer, said in an interview that the retailer is accelerating expansion plans for the new store concept due to its popularity with customers. She said the average cart size and value are higher than the Dollar General stores of the same name, despite refusing to provide numbers.

For the dollar store chain, Popshelf is a way to attract new customers and increase profits. Its target customers are women who live in the suburbs and have annual household incomes of $ 50,000 to $ 125,000, the company said. The stores are approximately 9,000 square feet and stock items such as housewares, seasonal decorations, and party supplies, including Dollar General’s own brand items. Over 90% of the goods Popshelf sells are $ 5 or less, the company said.

Dollar General’s clients typically live in rural areas, are on tighter budgets, and are slightly older, Taylor said. Customers have an annual household income of $ 40,000 or less. Sales in the dollar stores also include a heavier mix of grocery and snack items that tend to be less profitable for the retailer.

Dollar General has more than 18,000 stores in 46 states. To drive growth, the retailer opened additional locations in no time at all. It also adds fresh fruits and vegetables in more of its shops and Expansion into healthcare. It rented his first chief physician in July.

Taylor said the idea of ​​Popshelf was born while Dollar General was working on its Non-Consumables Initiative, a company-wide attempt to add more items such as home accessories and party supplies to its store lineup that began in 2018. She said the company saw an opening for another store.

“We have found that there are many advantages to having a stand-alone concept, especially as it is a really exciting, fun and engaging shopping experience in the small box store,” she said.

That inspired Popshelf’s emphasis on colorful displays and frequent changes of goods to make visiting stores feel like a “treasure hunt,” whether shoppers are looking for a gift, preparing for a party, or decorating for the holidays, she said.

Depending on the season, the product mix includes toys, throw pillows, Christmas decorations, pumpkin-shaped disposable paper plates, balloons, bath bombs and specialties such as hot cocoa and cheese for a charcuterie platter.

Housewares in particular are a hot category, including decorative and organizational items, Taylor said.

She said popshelf stores offer customers the ability to purchase online and in-store for pickup. She said the company is also likely to start delivering home purchases so people who don’t live near a popshelf store can buy the products. She said it got a lot of requests for it on social media.

The company is also testing a store-in-a-store format. It has opened 14 smaller versions of Popshelf in DG Markets, a Dollar General format that’s bigger and has more food choices, and more are being added.

Looking for growth, coping with inflation

Dollar General seeks to fuel growth – and attract buyers with more disposable income – as it prepares for the decline in sales and copes with inflation. As its budget-conscious customers experience higher prices at gas stations and grocery stores, it reduces the money they can spend in dollar stores. Compared to other retailers, the discounter also has fewer opportunities to raise prices due to its good reputation and the risk of deterring customers.

His main competitor, Money tree, took a big step last week and said it would pass more of the cost on to buyers. It will start selling most goods for $ 1.25 instead of $ 1 to cover rising freight costs.

Dollar General said Thursday that it expects sales to decline between 2.5% and 3% in the same business for this fiscal year. On a two-year basis, this corresponds to a growth of around 13% to 14% if one takes into account the jump in sales during the pandemic.

The company expects earnings per share for the year of $ 9.90 to $ 10.20, slightly higher than its previous expectations of $ 9.60 to $ 10.20.

For the third fiscal quarter ended October 29th, which the retailer reported on Thursday, earnings exceeded analysts’ expectations.

The company earned $ 2.08 per share on sales of $ 8.52 billion. According to Refinitiv, an average of analysts expected Dollar General to make $ 2.01 per share on sales of $ 8.50 billion.

But net income of $ 487.03 million was lower than a year ago when it made $ 574.26 million, or $ 2.31 per share.

At the close of trading on Wednesday, Dollar General’s shares were up nearly 6% this year. The stock closed at $ 222.79 on Wednesday, which equates to a market value of $ 51.98 billion.