Dollar General Learned What Whole Foods Did Not

 

What did Dollar General learn that Whole Foods did not?  That’s easy the consumer is dynamic not static.  But that’s just the beginning according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Let’s take a look:

1.       Time is the only commodity.

2.       Customer outcomes are more important that products.

3.       Fresh Food Fast is the only difference between profitable differentiation and commodity competition.

4.       Price = Transparency

Consumers are not dumb.  Well, there are some retailers out there that have told me “less than 30% of consumer read a daily newspaper, watch a nightly newscast, even fewer do real food research.  Consumers now know that there is no nutritional difference between a non-organic carrot an organic carrot.  So, why pay more. It makes them feel better. 

Dollar General like one of the worlds largest food retailers and sister company that Trader Joe’s knows, “Poor people must save, Rich people like to”. Today, brand messaging must be transparent misleading knowledge influencers will always backfire over time.

Recently, a team of Yale University public-health professors published a 34-page study that explained how to end the pandemic in America. The researchers’ conclusion? Dollar General.

Dollar General is currently the closest grocery store for millions of U.S. consumers; 75% of Americans live within 5 miles of a Dollar General. Adding COVID-19 vaccination clinics to Dollar General’s massive store footprint would get vaccines in the arms of the people most in need of them, thus giving America its best shot at ending the COVID-19 crisis, the researchers argued. Yes, get this, the Centers for Disease Control and Prevention (CDC) quickly agreed.

Now consider that in 2020, Dollar General opened more than 1,000 new stores, and remodeled another 1,670 locations. This year, Dollar General plans to open 1,050 new stores, remodel 1,750 stores and relocate 100 stores, representing 2,900 real estate projects in total. With a footprint of 17,275 stores, Dollar General is projected to have 18,316 locations by the end of 2021. How fast is Whole Foods growing or Amazon Fresh for that matter.

Success does leave clues and at Dollar General the clues are in the numbers.  The number of stores that they have and continue to add each and every year while Grocery Stores numbers continue to shrink.  Over the past 12 Years 50% of traditional grocery stores have closed while Dollar General continues to grow by selling more food. 

THE ROAD TO 34,000 STORES

2021: 18,227 (est.)
2020: 17,177
2019: 16,278
2018: 15,370
2017: 14,534
2016: 13,320
2015: 12,483
2014: 11,789
2013: 11,132
2012: 10,506
2011: 9,937
2010: 9,372
2009: 8,828
2008: 8,362

Source: Dollar General financial reports

 

For the fourth quarter ended Jan. 29, Dollar General (DG)  reported that same-store sales increased by 12.7% on a year-over-year basis and operating profit was up 21% to $872 million; revenue increased 17.6% to $8.4 billion. For fiscal 2020, Dollar General’s same-store sales were up 16.3% and its operating profit grew 54% to $3.6 billion; revenue increased 21.6% to $33.7 billion.

Dollar General CEO Todd Vasos, stated that “The larger market share and new customers can most likely be attributed to the retailer’s key initiative for growth: fresh food. Vasos continued “DG Fresh continues to be the largest contributor to the gross-margin benefit we are realizing from higher initial markups on inventory purchases, and we expect this benefit to grow as we continue to scale this transformational initiative”.

The fast is as Dollar General’s traditional stores that have been remodeled with coolers, the company typically sees a 4% to 5% rise in same-store sales. At its larger stores, where there’s room for 34 higher-capacity coolers, there’s a 10% to 15% rise in same-store sales.  Fresh Food Fast and for less, how is it that Kroger, Whole Foods, Publix, Walmart, and Albertsons still don’t get it?

Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter