Dollar General is embarking an an ambitious store expansion. And it’s relying on higher-income shoppers to help it succeed.
The value chain said Thursday that it plans to open 1,000 new Popshelf concept stores by 2025. Dollar General initially planned to launch roughly 30 Popshelf units in various markets across the United States by the end of the 2021 fiscal year.
Dollar General unveiled Popshelf, a new retail concept that offers accessories, decor, cosmetics, household supplies and more, last year in an effort to attract higher income shoppers. Roughly 95% of items in Popshelf stores are priced at $5 or less as opposed to sticking to a strict limit of $1.
The expansion of the Popshelf brand comes shortly after competitor Dollar Tree announced permanent price raises across Dollar Tree Plus stores and most Dollar Tree stores in November. All prices will now start at $1.25 instead of the $1.00 price point which has defined the chain for decades.
The trend toward higher pricing suggests that even dollar stores are not immune to the inflation, higher wage costs, and supply chain slowdowns that have all contributed to higher prices in across retail. Consumer prices rose by 6.2% in October compared to a year ago, representing the highest inflation rate since the 12-month period ending in November 1990.
Despite the new environment, value chains and dollar stores are continuing to open locations across the U.S. and beyond. Dollar General also announced Thursday that it plans to expand internationally for the first time by opening 10 stores in Mexico by the end of fiscal 2022.
“The opportunity to expand our footprint to serve communities in Mexico marks an exciting new era for our organization, and is a reflection of our continued innovative spirit and dedication to serving others,” said Todd Vasos, CEO of Dollar General. “We are excited to bring to the Mexican consumer the value and convenience that our U.S. customers trust us to provide, and we are confident in our ability to provide Mexican households with affordable access to everyday essentials.”
Dollar General currently operates a total of more than 18,000 stores across the U.S. The company reported a net sales increase of 3.9% to $8.5 billion for the third quarter and a same-store sales decrease of 0.6% year over year.