Dollar General pursues richest shoppers with 1,000 new stores

Now, the company will expand its efforts to gain wealthier customers in the suburbs using a new store model and a new name: Popshelf.
General dollar (DG) announced Thursday that it will open 1,000 Popshelf stores over the next four years. The retailer first introduced the concept last year and now has 30 Popshelf stores.

Dollar General hopes the new concept will help it attract customers different from its traditional base of rural buyers who earn around $ 40,000 per year. Popshelf stores cater to women in suburban areas with an annual household income between $ 50,000 and $ 125,000.

Popshelf stores are more similar to their competition Dollar tree (DLTR) outlets – which are also predominantly suburban and aimed at middle-income shoppers – than traditional Dollar General locations. The brand expansion also comes as Dollar Tree ends its 35-year strategy of selling everything for $ 1, which some analysts say risks alienating customers.

Dollar General executives said in a earnings conference call Thursday that they were accelerating their Popshelf strategy as the initial stores exceeded expectations and did not remove sales from its main banner.

Although Dollar General’s 18,000 stores primarily sell food, snacks, cleaning supplies, and home essentials, Popshelf stores are stocked with household furniture, party supplies, toys, and cosmetics for $ 5 or less. These products are more profitable than food, and the Popshelf concept grew out of Dollar General’s pre-pandemic strategy of adding higher margin products to its commodity mix.

Customers often visit Dollar General for specific needs – a shortage of milk or laundry detergent – but the company hopes shoppers who come to Popshelf will check out what’s new and leave with a few freebies and pillows.

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