Dollar General Posts Strong Cigarette Sales

Tobacco sales have helped Dollar General grow its Q3 sales by more than 10% over the same period last year.

December 10, 2013

KNOXVILLE, TN – It’s been nearly a year since Dollar General began selling tobacco, and the move has been paying off and building basket size for its customers, WBIR.com reports.

Dollar General Chairman and CEO Richard Dreiling said last week that tobacco sales helped boost Dollar General’s third-quarter sales 10.5% over the same period last year, to $4.4 billion, with comparable-store sales up 4.4%.

"As we expected, the addition of tobacco products resulted in strong customer traffic growth throughout the quarter," Dreiling said.

Dreiling said in the third quarter, 44% of cigarette shoppers bought more than just cigarettes, while 26% bought only tobacco. "So we're beginning to convert the cigarette customer into a shopper."

Dollar General said while testing tobacco sales over the past two years, the average purchase per customers was $14 when tobacco was included, versus an average of $11 otherwise.

"The addition of tobacco products has had a significant impact on growth in our customer traffic, which I continue to believe is the most-important metric with regard to evaluating the success of our tobacco initiative," Dreiling said. "We're very pleased with the progress we made in building our market share in tobacco. Going forward, we expect both traffic and transaction size to build as customer awareness of tobacco products in our stores continues to grow.”

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