Not content to watch the lucrative home décor and improvement wave pass it by, budget retailer Dollar General plans a significant expansion of its upmarket Popshelf store concept, pushing into younger and wealthier suburban markets seeking higher basket values.
As the discount chain delivered fiscal third-quarter financials on Thursday (Dec. 2) highlighting a net sales increase of 3.9% to $8.5 billion, Dollar General EVP/Chief Merchandising Officer Emily Taylor told CNBC, “We realized a standalone concept had a lot of merit, particularly as it related to providing a really exciting, joyful, engaging shopping experience in the small-box store.”
Introduced in October 2020, Popshelf locations currently number around 36 in six states, with the new plans envisioning 1,000 stores up and running by FY 2025 ending January 2025.
Averaging 9,000 square feet, Popshelf stores’ “initial targeted customers are primarily female and are located in diverse suburban communities with a total household annual income ranging from $50,000 to $125,000,” according to a previous statement.
By contrast, Taylor told CNBC that Dollar General customers tend to older, live in more rural communities, and have annual household incomes in the $40,000 range.
The focus is on “continually-refreshed merchandise, seasonal specials and limited-time items while also surpassing price and value expectations. pOpshelf shelves will also carry a highly-curated crossover assortment of Dollar General’s private brands, many of which have been recently rebranded,” the company said, with price points with on the vast majority of items set at $5 or below.
See also: Dollar General, DoorDash Team Up for Same-Day Delivery
Discount Retailing Differentiates
The Popshelf expansion leverages several trends in pandemic-era retailing, from strategic use of limited-time sales events to product selections that cater to specific shopper tastes.
Such tactics are winning with consumers. A possible analog for the store concept are product drops and flash sales, which PYMNTS finds builds brand affinity among shoppers.
An innovation arising from Dollar General’s non-consumables initiative (NCI), Popshelf stores are designed as “a differentiated retail concept” that improves on the discount shopping experience and offers “deals in targeted non-consumable product categories.”
Dollar General stores are more focused on grocery and snack categories, and housewares. The discount chain has approximately 18,000 stores in 46 U.S. states at present.
The Popshelf expansion is the latest move to innovate from Dollar General. In mid-November the chain announced that it is partnering with DoorDash to bring on-demand delivery of household essentials including food, snacks, cleaning supplies to rural markets.
According to a statement, “On-demand delivery from DoorDash is currently available from more than 9,000 Dollar General stores with plans to expand to more than 10,000 locations by December 2021. Dollar General and DoorDash initially piloted a program in summer 2021 with approximately 600 stores in rural and metropolitan communities.”
These efforts appear aimed at a total refresh of the brand. As CNBC noted, “the ambitious expansion plan comes as the retailer said it will test its first international market by opening 10 stores in Mexico by the end of fiscal 2022. Dollar General said it expects open 1,110 new stores in the coming fiscal year, including Popshelf, Dollar General and the international locations.”
See also: Dollar General Aims To Become ‘Health Destination’ With Expanded Product Selection
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