“Dollar General is expanding because rural America is struggling.”
Sarah Nassauer‘s latest story in the Wall Street Journal, “How Dollar General Became Rural America’s Store of Choice,” profiles the discount chain’s rapid growth in areas where residents have little choice in where they shop locally for basic essentials. For those who live forty miles out from the nearest Wal-Mart, the local Dollar General is often the only game in town for daily necessities, from soups to socks to shower curtains.
As discount chains become lifelines for more and more cash-strapped Americans, stores like Dollar General are proliferating — and profiting — as the market “adjusts” to meet the single-serve needs of rising income inequality.
The local Dollar General store, built on a rural highway and surrounded by farmland, sells no fresh meat, greens or fruit. Yet the 7,400-square-foot steel-sided store has most of what Eddie Watson needs.
The selection echoes a suburban drugstore chain, from shower curtains to breakfast cereal, toilet paper, plastic toys and camouflage-pattern socks. Refrigerators and freezers on one wall hold milk, eggs and frozen pizza.
Many items are sold in mini bottles or small bags, keeping costs lower than a trip to the Wal-Mart Supercenter down the road. The two registers are staffed by one cashier, except during rush hours after school and after work.
“It’s just closer,” said Mr. Watson, a 53-year-old construction worker who filled his cart with cans of chicken soup, crackers, cold cuts and toilet paper.
While many large retailers are closing locations, Dollar General executives said they planned to build thousands more stores, mostly in small communities that have otherwise shown few signs of the U.S. economic recovery.
The more the rural U.S. struggles, company officials said, the more places Dollar General has found to prosper. “The economy is continuing to create more of our core customer,” Chief Executive Todd Vasos said in an interview at the company’s Goodlettsville, Tenn., headquarters.
“We are putting stores today [in areas] that perhaps five years ago were just on the cusp of probably not being our demographic,” he said, “and it has now turned to being our demographic.”
Sales at the store are up 17% so far this year compared with last year, a spokeswoman said.
On a recent weekday, Jackie Buchanan pulled up to the store astride a forest-green Craftsman riding mower, to buy shampoo and lawnmower-carburetor cleaner. “I’m just one mile down the road,” said Mr. Buchanan, 51, who is unemployed.
Robin Swift, 48, arrived to buy after-school snacks rather than drive 10 miles to the Wal-Mart. “It’s a small town,” she said, “and we don’t have another choice.”