Dollar General Hopes to Reduce Shrink With Streamlined Supply Chain

The retailer will stop carrying some high-shrink items.

July 16, 2024

Dollar General is streamlining its supply chain and reducing the assortment and quantity of goods it carries “as part of a multipronged plan to improve efficiency and reduce theft and shrinkage,” reported Wall Street Journal. The company is also restructuring its distribution network and warehouse sorting processes to bring goods to shelves faster.

Chief Executive Todd Vasos said on a May 30 earnings call that the retailer’s goal is to ensure inventory “gets to the shelf when it comes in and it gets in front of the consumer as quickly as possible,” reported the Journal.

Dollar General plans to stop carrying 1,000 products this year, many of which it classifies as high-shrink items. “Too much inventory or over-inventory in some instances always leads to additional shrink,” Vasos said. The retailer reported its inventory level fell 9.5% on a per-store basis for the quarter ended May 3 compared with the same period last year, according to the Journal.

Dollar General also cut back on self-checkout to reduce shrink, saying it would remove self-checkout registers from 300 stores that have the biggest issues with shrink, reported Fox Business, while converting other self-checkout registers to assisted checkout.

Last year, Dollar General replaced its CEO due to lower-than-expected profits. It also invested in private label food products, rolling out more than 100 new private label items.