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12/08/2020

Dollar General Plans Another Year of Accelerated Expansion in 2021

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GOODLESTTSVILLE, Tenn. — Dollar General Corp. is planning significant store expansion in 2021 as it continues to roll out its DG Fresh food offerings as well as other merchandise initiatives.

The retailer seeks to open 1,050 stores, remodel 1,750 stores and relocate 100 stores, reported Convenience Store News sister publication Progressive Grocer.

"We are excited to once again accelerate our real estate growth plans in fiscal year 2021," said Jeff Owen, Dollar General's chief operating officer. "Our portfolio of high-return real estate projects continues to be a top priority for capital allocation as we look to continue delivering long-term shareholder value. With a robust pipeline in place and plans to execute an average of nearly eight real estate projects per day in fiscal year 2021."

Notable initiatives for 2021 include the ongoing rollout of Popshelf, Dollar General's newest retail store concept, following the opening of the first two Popshelf stores in Nashville this fall. The new banner aims to engage customers with a fun, affordable and stress-free shopping experience where they can find on-trend seasonal and home décor, health and beauty must-haves, home cleaning supplies, party goods, entertaining needs, and more, with approximately 95 percent of items priced at $5 or less.

"During the quarter, we also continued to make great progress advancing our key strategic initiatives, including the rollout of DG Pickup across nearly our entire store base, and the launch of our newest store format, Popshelf," said CEO Todd Vasos. "In total, we executed 765 real estate projects, further laying and building the foundation for future growth. Overall, our ongoing operating priorities, coupled with our key strategic initiatives, position us well to continue delivering value and convenience for our customers, along with long-term sustainable growth and value for our shareholders."

The expansion push also includes increased focus on food.

"We are in the process of building, expanding or opening a number of distribution centers across our dry and DG Fresh networks. And while we expect these investments will enable us to drive even greater efficiencies going forward and further support future growth, these investments will pressure gross margin rates in Q4," said John Garratt, executive vice president and chief financial officer.

During the first three quarters of 2020, Dollar General added approximately 49,000 cooler doors across its store base. It expects to install more than 60,000 cooler doors by the end of the year, most of which will be in its higher capacity coolers.

The company also recently began construction on its first ever ground-up combination DG Fresh and dry distribution center in Blair, Neb. It is expected to be completed in early 2022 and enable Dollar General to drive greater efficiencies.

"We plan and continue to believe DG Fresh could provide a potential path forward to expanding our produce offering to even more stores in the future," Vasos added. "In total, we were self-distributing to more than 13,000 stores from eight DG Fresh facilities at the end of Q3. We expect to capture benefits from this initiative in more than 14,000 stores from 10 facilities by the end of this year, and are well on track to complete our initial rollout across the chain in 2021."

Goodlettsville, Tenn.-based Dollar General operates 16,720 stores in 46 states.

Convenience Store News and Progressive Grocer are properties of EnsembleIQ.