Retail

Dollar General Stores Eye Rural Expansion

Dollar General is planning an expansion with a focus on rural American. The chain announced Wednesday (Dec. 27) that it will be opening its 17th distribution center in the U.S. — a facility that is set to create approximately 400 new regional jobs.

The new distribution center is slated to break ground in early 2018 in Longview, Texas, and is planned as a 1 million-square-foot facility. According to CEO Todd Vasos, it will be instrumental in suppling Dollar General’s nearly 1,400 stores across the state.

The announcement follows reports that the Tennessee-based discount goods chain will be adding nearly 900 new stores to its existing 14,000-store roster this year. Dollar General’s investors seem to approve of the aggressive growth strategy, sending its stock price up 26 percent year-on-year in 2017 and making the company one of physical retail’s few success stories this year.

“We look forward to the facility helping better serve our customers with value and convenience, as well as creating career opportunities for approximately 400 future Dollar General employees,” Vasos said in a statement.

Dollar General has managed same-store sales growth for an impressive 27-year streak, and has pushed its market cap to $25.1 billion. That, incidentally, makes the company larger than Kroger, the nation’s largest grocery chain. Dollar General focuses on opening stores in rural and exurban areas, those often located outside the range of Walmart and other larger players. In recent years, it has also tried its hand at urban expansion with locations in New York City and Chicago.

“Not all segments of retail are hurting,” said Mickey Chadha, vice president of Moody’s Investors Service, in a Dec. 7 note about the company’s latest earnings report. “The combination of low prices, broad assortment and convenience will allow Dollar General to continue to grow as the income demographic primarily shopping at the stores has a limited amount of dollars to spend per visit and continue to find the value proposition very attractive.”

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