Dive Brief:
- Dollar General is launching a new concept, dubbed "Popshelf," focused on seasonal, home decor and beauty products, as well as cleaning supplies and party goods.
- Most of the items are priced at $5 or less and include "a combination of continually-refreshed merchandise, seasonal specials and limited-time items," as well as curated cross-over products from Dollar General's private brands.
- The discounter plans to open two stores this fall under the concept near Nashville, Tennessee, and open around 30 Popshelf stores by the end of 2021.
Dive Insight:
In announcing the new concept, Dollar General said it was initially targeting women in "diverse suburban communities" with income ranging from $50,000 to $125,000.
The stores are around 9,000 square feet and operate with a team of about 15, according to Dollar General, which emphasizes their differentiation from the company's main banner.
They grew out of the retailer's "non-consumables initiative," which Dollar General even gives its own acronym (NCI). That initiative is meant to capture more dollars from what the retailer's executives describe as their "trade-down customer," i.e., those of higher incomes that may seek out value from a deep discounter like Dollar General.
"It's been working fabulous so far and the great thing is we've been able to take the learnings from those thousands of stores that we've already done and apply them back into the mother-ship if you will or our nearly 17,000 stores," CEO Todd Vasos said of the non-consumables initiative in a September analyst call, according to a Seeking Alpha transcript. CFO John Garratt also noted that Dollar General's non-consumables mix also comes with higher margins for the retailer.
In Thursday's press release, chief merchant Emily Taylor said of the new concept store, "At popshelf, customers will find a differentiated retail concept that seeks to bring joy to their shopping experiences, with surprising deals in targeted non-consumable product categories."
Dollar General has been in steady expansion mode for years as much of the retail world has struggled to find growth. The COVID-19 pandemic has not slowed the retailer down. Instead, it has accelerated growth. The retailer said in August that "consumer behavior driven by COVID-19 had a significant positive effect" on its business.
The second quarter brought net sales growth of 24.4% and comparable sales growth of 18.8%. Wells Fargo analysts said at the time of Dollar General's Q2 report that the performance showed "just how well positioned the company is to take advantage of the current environment."
