Dollar General to Invest $100 Million in Labor

Chain opens 19,000th store and its first outlet in Mexico.

March 23, 2023

GOODLETTSVILLE, Tenn.—2022 looked good for Dollar General. In the fourth quarter of 2022, the chain posted net sales of $10.2 billion, a 17.9% increase compared with the same period in 2021. Comparable-store sales rose 5.7% year over year in Q4, while operating profit was up 17.1%. But the chain wants even better results and plans to invest about $100 million in its stores this year, most of which will go to boosting working hours, according to GroceryDive.com.

In a recent earnings call, Jeff Owen, CEO of Dollar General, said the labor-focused investment will “support our expectations regarding consistent store standards while further enhancing the associate and customer experience.”

The announcement from Dollar General regarding increased staffing levels follows a U.S. Occupational Safety and Health Administration disclosure in January that the company was cited repeatedly for having unsafe working conditions in its stores. Violations included blocking exit routes with merchandise and storing boxes in unstable stacks, according to the agency, which has reportedly fined the discounter more than $15 million since 2017 for assorted “workplace safety violations.”

The fast-growing retailer recorded stronger results during Q4 than it did for fiscal 2022 as a whole. Net sales were up 10.6% during the year, which ended Feb. 3, while comparable-store sales rose 4.3% and operating profit grew 3.3%, the company reported. The comparable-store sales increase in Q4 is mainly attributable to inflation, but results were held back by a drop in store traffic caused by poor weather in some parts of the country in late December, Owen said during the call. Basket sizes also were down during the quarter.

Private-label sales played a major role in driving Dollar General’s results, Owen said. The retailer’s house brands now account for more than a fifth of the company’s total sales, and the chain is boosting its private-brand assortment in several categories, including candy, pet food, OTC health care products and perishables.

Dollar General continues growing. The chain opened its 19,000th store in January and recently opened its first outlet in Mexico. The company continues to emphasize perishables and produce and expects to offer fresh produce in 5,000-plus outlets by the end of 2023. That’s up from the 3,200 stores that carried those items as of the end of 2022, Owen said.

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