Dollar General Continues to Attract Affluent Shoppers

The dollar-store chain reports that its fastest-growing segment is customers who are making more than $70,000 per year.

June 21, 2011

GOODLETTSVILLE, Tenn. - Dollar stores haven??t lost their appeal to bargain hunters, Marketing Daily reports. Dollar General reports that wealthy shoppers continue to flock to their stores, making those with household incomes above $70,000 annually the chain??s fastest-growing customer demographic.

Half of the chain??s new customers are from non-core, higher-income families, with 22.4 percent in the $70,000 or more household category, said Rick Dreiling, chairman/CEO. Low prices initially are the attraction ?" the stores sell nearly a quarter of their products for a buck or under ?" convenience has become more crucial.

"We've made a radical shift," said Dreiling. "We proudly sell both national brands and private-label, focusing on everyday necessities at compelling prices. We have a broad selection, but not very deep."

Prices usually fall 41 percent under drugstore prices and 22 percent less than grocery store prices, but supercenters typically match dollar stores in cost. "But with an average size of 7,100 square feet and cost parity with supercenters that are 125,000 square feet, we are more convenient," he said.

Dollar General also has revamped its marketing plan to use "our store as the communication tool," and will be launching a new social media campaign. Customers still favor the chain??s low prices, which drives shopper loyalty.

Looking to the future, Dreiling pointed to expansion goals of 625 new stores and 550 redesigns in 2011, plus adding overall square footage by 7 percent per year. Dollar General hopes to add 11,000 new locations, including 8,000 in existing areas, and the rest in new states, such as California, Connecticut, New Hampshire and Nevada.

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