The addition of Dollar General to the S&P 500 last month provides further evidence of the growing strength of the retailer and the trade class it represents.

The addition of Dollar General to the S&P 500 last month provides further evidence of the growing strength of the retailer and the trade class it represents.

With its intense focus on delivering value to customers, Dollar General has struck a chord with shoppers hit hard by the recession and anemic economic recovery. That orientation, together with enhanced operational efficiencies, has propelled the company, which operates more than 10,000 stores in 40 states, to the front ranks among brick-and-mortar retailers in terms of sales gains.

During the fiscal year ended February 3 volume at Dollar General advanced 13.6% to $14.81 billion, while same-store results rose 6%. Net earnings were better still, increasing 22.1% to $766.7 million. The company’s performance has remained strong during the current fiscal year. Overall sales in the second quarter rose 10.4%, with comparable-store volume up 5.1%. Adjusted net income grew 27%.

"Our same-store sales increase demonstrates the ongoing execution of the initiatives around our key operating priorities and is evidence of our continued importance to our customers," chairman and chief executive officer Rick Dreiling said at the time the results were announced. The chief architect of Dollar General’s emergence as one of the nation’s top-performing retailers, a process that included its reemergence as a publicly traded company in November 2009, Dreiling, whose prior retail experience came in the supermarket and chain drug store sectors, has succeeded in elevating expectations for employees, business partners and consumers.

Not all that long ago, dollar store operators were viewed as the poor cousins of other mass market retailers, a place where CPG suppliers could dispose of close-out merchandise. Through the efforts of Dollar General and other members of the trade class, they have become serious competitors in such categories as consumables and health and beauty aids. Vendors that once approached the channel warily are now eager to increase their presence there and capitalize on dollar stores’ impressive growth rate.

Under Dreiling’s leadership, Dollar General has demonstrated that, by "being trend-relevant while maintaining great value," a retailer can reinvigorate its business and help transform perceptions about a channel where it is the leading practitioner.