Making Billions at the Dollar Store

Dollar General serves more low- and lower-middle-income households than big-box rivals.

May 28, 2019

GOODLETTSVILLE, Tenn.—Dollar General is a retail giant that raked in $25.6 billion in revenue last year—eclipsing Macy’s in retail sales for the first time. The largest U.S. retail chain by store count, Dollar General also generated one of the top performance records in retail: The company reported its 29th straight year of same-store sales growth—a streak no other major U.S. retailer can match, reports Fortune.

But the question is this: If Dollar General is serving the bottom on the nation’s economic pyramid, how are they doing so well?

According to research firm Kantar, 57% of Dollar General’s customer base live in households with income of less than $49,900, and 30% live on less than $25,000 (For reference, the average U.S. household income is just under $61,000.)

“Just because I don’t have a lot of money, that doesn’t mean I don’t feel like having some of the finer things,” says Todd Vasos, CEO of Dollar General, paraphrasing his prototypical shopper. “We can offer her both value and an indulgence she may want.”

With 15,472 stores, Dollar General is located within 5 miles of three-quarters of Americans. And shopping at Dollar Stores or discount retailers like T.J. Maxx is becoming more appealing and more socially acceptable. Because of that, Dollar General is expanding its marketing efforts to include middle-class shoppers.

The fastest-growing demographic for the store is households that earn between $50,000 and $75,000 a year, J.P. Morgan estimates.