Investigation into Dollar General's Property Acquisition Approach
Dollar General, the 16th largest retailer in North America, is pushing forward with its ambitious growth plans, as revealed in its recent updates. With over 20,500 stores across the United States and Mexico, the company is set to expand further, targeting both rural and urban areas.
In 2025, Dollar General plans approximately 4,885 real estate projects, including the opening of 575 new U.S. stores and up to 15 in Mexico. The company's focus on small-box stores allows for penetration into smaller communities and urban locations, capturing new customer bases. Remodeling existing stores aims to modernize layouts and shopping experiences, potentially improving sales per square foot and overall asset efficiency.
Dollar General's retail media initiatives are also gaining momentum. The launch of the DG Media Network, using in-store digital screens for targeted advertising, enhances customer engagement and offers an additional revenue stream. The rollout of pOpshelf, a digital commerce platform, complements these efforts by integrating technology into the shopping experience.
The company is maintaining strong cost discipline while investing around $12 million in Q1 2025 on technology initiatives related to retail media and store modernization. Remodeling existing stores is a cost-effective alternative to opening new locations and has the potential to improve financial returns.
Dollar General is also partnering with experiential marketing platform Recess to hyper-target customers in their everyday lives, and has teamed up with rewards app Fetch to provide DGMN advertisers another high-performance solution to engage high-intent consumers.
The company's delivery partnership with DoorDash continues to exceed initial expectations for both incrementality and sales. Dollar General has also launched its own same-day home delivery offering through its DG digital solutions, now available in more than 3,000 stores.
During Progressive Grocer's GroceryTech event in Dallas June 10-12, more insights into Dollar General's retail media efforts will be shared. The company's CEO, Todd J. Vasos, also discussed the company's digital initiatives, including retail media, during the earnings call.
Despite the increased cost of building new stores, Dollar General is implementing a new remodel program called Project Elevate, aimed at bolstering performance in portions of its mature store base. The cost of a Project Elevate remodel is significantly less than a new store, making it a cost-effective strategy for the company.
In summary, Dollar General's real estate strategy is characterized by aggressive yet strategic expansion and significant store remodeling that enhances customer experience and operational efficiency. Their retail media initiatives, particularly the DG Media Network and digital commerce platform, reflect a shift toward technology-enabled customer engagement. These moves are balanced with disciplined cost control and strategic supplier partnerships to sustain returns and support long-term growth.
Dollar General, in its Q1 2025 financial investments, is dedicating around $12 million to technology initiatives encompassing retail media and store modernization. The retail media initiatives include the DG Media Network, which leverages in-store digital screens for targeted advertising.
The company's retail expansion strategy also includes partnerships with other industry players, such as DoorDash for delivery and Fetch for rewards, to enhance customer engagement and generate additional revenue streams.
