Dive Brief:
- Dollar General is planning to increase sales through enhanced experiences in-store and online, executives said on a Q4 2024 earnings call Thursday.
- The retailer aims to simplify its operating model and retrain associates to provide shoppers with fast and friendly experiences, according to CEO Todd Vasos. One goal is reducing the number of “unnecessary” activities associates need to perform, which ongoing inventory reduction efforts are assisting.
- “We know that an essential part of convenience for our customers is the ability to not only reach the store easily, but also the quality and speed of their in-store experience,” Vasos said during the call.
Dive Insight:
Dollar General is sharpening its in-store experience and building out e-commerce capabilities to ride its ongoing sales momentum.
At least 70% of the off-price retailer’s stores are in shape to serve customers “very well” in terms of their combination of operations, staffing levels and in-stock rates, according to Vasos. The company aims to bring that share to 80%.
“I would tell you that the customers are already seeing it, feeling it,” Vasos said. “We're hearing it in our customer work — our customer surveys — and obviously in our sales. And so I feel very good about what that looks like and where we'll continue to make good headway into ‘25.”
Same-store sales rose 1.2% year over year in the fourth quarter of 2024, according to a company earnings report. Net sales grew 4.5% year over year to $10.3 billion for the quarter. However, the retailer’s net income dropped 52.4% to $191.2 million.
Part of Dollar General’s store improvement effort is completing the rollout of its next-generation point of sale system in the first half of 2024, according to Vasos. The updated POS is expected to make checkout easier for customers while streamlining certain in-store activities for associates.
This isn’t the first adjustment Dollar General made to its checkout experience. The retailer invested in additional front-of-store employees in late 2023 to reduce shrink and offer more customer assistance, then significantly scaled back self-checkout kiosks in 2024.
It is pairing store upgrades with new delivery options. The retailer is partnering with DoorDash to offer delivery from over 16,000 stores, and is also expanding a same-day delivery pilot from 400 stores currently to its goal of 10,000 stores.
Dollar General’s overall CX improvements are coming in time to potentially catch the eye of consumers trading down to save money.
Three-quarters of consumers said they looked for ways to reduce their spending in the first quarter of 2025, according to a survey of 4,000 people by McKinsey & Company. Among these, more than one-third say they swapped retailers for a lower price.
