Dollar General works hard to live up to name; vouches for non-consumables

HTT Staff -- Home Textiles Today, 4/24/2012 11:24:37 AM

New York - Even though consumables is its fastest growing business and considered a traffic driver, discount department store chain Dollar General stressed it continues to be an old-fashioned general store retailer where all merchandise categories are created equal.

During the company's 45-minute presentation at the Barclay's Retail and Restaurant Conference here today, ceo and chairman Richard Dreiling told investors that at Dollar General, "we feel consumables are just as important as non-consumables."

He explained that the retailer's concept, "and what we are trying to be is today's general store - the kind of place our grandparents or their parents shopped at. [General stores] had a little bit of everything, but no depth in anything, and we've tried to be just that."

It's a formula that works for Dollar General, Dreiling explained.

"Even though we've come in and added over 2,000 consumable units to our consumable mix, we've managed to widely raise our margins" - a feat achieved, he said, through "better shrink, better warehousing, better private brands and sourcing," among other efforts.

This approach to business has resulted for Dollar General in increased traction in non-consumable areas, like hardware, stationary, home - "we're seeing a little more movement there," he went on.

Only in apparel is Dollar General's business still soft. To remedy that, the company has hired a new vp of apparel who reports directly to the company's chief merchant, "and also, we think we will need a little more help from the economy to get our non-consumables side up."

While Dollar General's core customer - the low-income bracket - "is still in a recession" and is earning less than in better economic times, the retailer reiterated it has seen a boost in "trade-in" or "trade-up" customers - more specifically, shoppers whose annual household income is $75,000 and up.

"That's our fastest growing segment," Dreiling said, furthering noting that 82% of the retailer's customers are women. "They like our consumables, but they can still go to J.C.Penney [for example] to buy their non-consumables."