Aggressive expansion still works

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GOODLETTSVILLE, Tenn. — Maintaining an aggressive growth strategy, Dollar General Corp. will open 975 stores this fiscal year and remodel another 900.

The company projects 2019 capital expenditures of $775 million to $824 million, up from $734 million last year.

Capturing growth opportunities is an operating priority, chief executive officer Todd Vasos said during a conference call discussing fourth quarter results. “As we enter 2019, our proven high- returns, low-risk model for real estate growth is a core strength of the business,” he said. “We have a long-standing track record of successfully opening hundreds of stores every year that meet our strict return thresholds.

“The flexibility of our model has allowed us to invest in new formats, store growth and a remodel program, all with strong returns that contribute significantly to our growth.”

He said the chain has refined and enhanced the DGX store format, and expressed confidence that the smaller box can drive profitability. DGX stores are about half the size of a traditional Dollar General and cater to “vertical living customers,” particularly Millennials.

New chainwide initiatives for this year include DG Fresh, a multiphase shift to self-distribution of perishable goods, primarily fresh and frozen. Vasos said DG Fresh will cut product costs, boost in-stock levels and “allow us to control our own destiny in fresh foods.” It will mean “we can carry more of the fresh products and brands our customers want.”

Another 2019 launch will be Fast Track, an approach to increasing in-store labor productivity starting with fundamental changes at distribution centers. Fast Track will enhance customer convenience and improve on-shelf availability, said Vasos. “Driving our performance higher in these areas will be foundational to our ability to execute on our ‘buy online, pick up in-store’ pilot later this year.” Fast Track has “potential to be a significant and incremental driver of store-level efficiency.”

Dollar General’s investment in its workforce includes a new private fleet driver training program for distribution center employees, to complement such other existing educational benefits as tuition assistance and college course credits for store manager training. “Our investment in store manager wages and training continued to pay dividends in 2018, and we finished the year with our lowest store manager turnover rate on record,” Vasos noted.



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