GOODLETTSVILLE, Tenn. — Rick Dreiling has had a transformative effect during his tenure at the helm of Dollar General Corp. Since Dreiling joined the company as chief executive officer in January 2008, Dollar General has increased its store count by more than 40%. (The company opened its 12,000th store on May 30, and as of October 30 it operated 12,396 stores in 43 states.) Dollar General’s sales increased more than 80% in the same period.
Dreiling already had an impressive career before he joined Dollar General. He first rose through the ranks at Safeway, where he got his start carrying out groceries and made it all the way up to executive vice president.
Dreiling then made his mark on the chain drug store industry, first partnering with Warren Bryant on the transformation of Longs Drug Stores, then leading a turnaround at Duane Reade.
It is for the impact he has had in leadership positions at all these retailers that MMR is honoring Rick Dreiling with its Lifetime Achievement Award.
Dreiling, who is set to retire from employment with Dollar General later this month, says he is most proud of his work at that company, which is where he spent the most time in one position than at any other point during his management career. (Even though Dreiling spent 33 years at Safeway, he says he never spent more than three years in one place.)
Dollar General has accomplished a lot in the past eight years.
“I’m very proud of what this company has done,” Dreiling says. “What it has achieved, and how it’s been able to in all honesty redefine the small-box discount channel to the point where it is relevant to consumers and competitors are actually looking at it and paying attention to it.
“And the chance to see all of the financial metrics, and especially the metrics that affect our people, all rise and go in a great direction for everyone — that has been really rewarding.”
One of the key metrics that improved at Dollar General under Dreiling was the company’s internal promotion rate.
“One of the advantages of the growth of Dollar General over the last eight years, and all the work we did on raising our sales per square foot, is what those things do to create opportunities for the employee,” Dreiling says. “And one of the things that we established when we got together in January of ’08, was that if we were going to be successful our employees would be the key to that success.
“And over the last eight years we’ve been able to look at our store managers and turn them into district managers. We’ve also turned our assistant managers into store managers and our district managers into regional managers. And it’s very thrilling to see people who are working very hard be able to grow as the company grows.”
Dreiling says that he believes that having people come in from outside an organization is a good thing, because it results in cross-pollination and the introduction of new perspectives and ideas.
“But a healthy organization also grows from within,” he says. “And I think a large part of the success we’ve had is due to the fact that we’ve also been able to grow our people’s careers along the way. I think those two things go hand in hand.”
And because of the types of neighborhoods Dollar General serves, the opportunities the retailer gives its employees can generate good will among its customers.
“We’re in a lot of small communities where our customers know our employees and our employees know our customers,” Dreiling says. “And I think that when our customers see our employees getting ahead, they feel like one of their family members is getting ahead.”
Having arguably helped raise the profile of the dollar store channel and put it on the radar of many mass retail executives who had been ignoring it, Dreiling is not concerned that other retail concepts will now be able to throttle the continued growth of dollar stores.
“I think the viability of the format is as strong as it ever has been,” Dreiling says. “I think that our everyday low price model with the added convenience of over 12,000 stores, that’s a pretty viable shopping experience.
“And I think the beauty of this channel and the future of this channel is at the intersection of price and convenience for the customer. That’s a powerful combination. And getting in and out of a 7,500-square-foot store is always going to be a lot easier than getting in and out of a 175,000-square-foot store. I’m as bullish on this channel as I was when I got here in January of ’08. I am excited about what the Dollar General leadership team with Todd Vasos as chief executive officer will accomplish in the coming years.”
Asked about the differences between the consumers who shop different retail formats, Dreiling responds by flipping the question to focus on the similarities.
“Obviously we can argue that they’re different trips,” he says. The trip to the grocery store is a stock-up trip, and a trip to the drug store is a little bit of convenience and a little bit of I want to look really good or I feel really bad. And the dollar store trip is a kind of combination of value, convenience and a treasure hunt, and when people talk about a treasure hunt in our channel, it’s partly about finding something that offers a tremendous value.
“But I think it’s fair to say there are more similarities than differences across the channels now, which is why we see so much channel blurring now, than there is differences.”
One thing retailers of all stripes need to offer is an efficient shopping experience, because all consumers are time starved, and everybody is looking for value.
“Of course different people have different ideas about value,” Dreiling says. “And I also think it’s possible in the future that different retailers will satisfy different pieces of the value equation. Dollar stores are obviously not going to offer an ideal stock-up trip. The Dollar General customer is a price sensitive customer who appreciates the convenience coupled with everyday low price. And being able to continue to leverage being convenient and not trying to offer a stock-up experience will help us differentiate ourselves.”
Other kinds of retailers also have viable niches to fill.
“The drug chains are doing a marvelous job of talking about wellness and about beauty,” Dreiling says. “And some of the grocery chains are doing a great job of broadening their appeal, by moving into organic products and other areas.”
Dreiling says many retailers have successfully broadened their appeal, but notes that it is also true that no retailer can satisfy every customer every day.
“Over my many years in retail, I have seen retailers lose their way,” Dreiling says. “And even as retailers try to broaden their appeal, or try to enhance their offering or add value to it, it’s clearly important that you don’t lose track of your core competency.”