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Key Takeaways
- Americans' search for less-expensive versions of products could benefit Dollar General, CEO Todd Vasos said.
- He said that the bargain retailer could also attract shoppers who used to shop at recently closed competitors.
- Vasos stated that Dollar General plans to offer delivery service from 10,000 stores before the end of the calendar year.
Dollar General’s CEO, said that consumers are buying less, which could be a good thing for the retailer.
Americans have been seeking out cheaper versions of products—or trading down—while closings at some competing retailers has been giving Dollar General a chance at winning over new shoppers, CEO Todd Vasos said on an earnings call Thursday. The company reported today that it had better-than expected fourth-quarter sales, but missed profit expectations.
Vasos says that the trend of trading down has increased through the end 2024 and beginning 2025. He said that the trend could be beneficial for Dollar General. Dollar General owns both its namesake store and pOpShelf. This retail concept has slightly more expensive items than the bargain brand.
“We’re focused on ensuring we put our best foot forth.” So when these customers come in our stores, they become sticky and continue to shop with us," Vasos said, according to a transcript made available by AlphaSense.
Americans' focus on saving has some downsides for Dollar General, though. The company's core lower-income consumers have been financially squeezed, Vasos said. He said the company gained market shares in some categories but that sales of seasonal homewares and apparel were sluggish.
"Many of our customers report that [they] only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities," Vasos said.
Dollar General has a plan to increase its customer base. Around 400 stores offer delivery via a partnership DoorDash (DASH), but Vasos said that the option could be available in 10,000 stores by the year’s end.
Vasos says that while Walmart (WMT), Target (TGT), and other companies have made progress with their delivery services, Dollar General stands out because it can deliver goods quickly to rural residents. Dollar General orders are bigger than what people spend in stores, and this could lead customers to become more loyal.
“There is no one out there today that can deliver to small-town rural America within an hour," Vasos said. "We can do that."
