Key Takeaways
- Americans’ search for less-expensive versions of products could benefit Dollar General, CEO Todd Vasos said.
- The bargain retailer may also be able to pick up shoppers who frequented recently-closed competitors, he said.
- Dollar General aims to offer delivery services from 10,000 stores by the end of the year, Vasos said.
Consumers are trading down, which could be good for Dollar General (DG), the retailer’s CEO said.
Americans have been seeking out cheaper versions of products—or trading down—while closings at some competing retailers has been giving Dollar General a chance at winning over new shoppers, CEO Todd Vasos said on an earnings call Thursday. The company earlier today reported better-than-expected fourth-quarter sales but missed profit estimates.
Trading down has accelerated through the end of 2024 and the beginning of 2025, according to Vasos. He said the trend could be good for Dollar General, which owns its namesake stores along with pOpShelf, a retail concept with slightly pricier items than the bargain brand.
“We’re squarely focused on ensuring that we have our best foot forward. So when these customers come in our stores, they become sticky and continue to shop with us,” Vasos said, according to a transcript made available by AlphaSense. Â
Americans’ focus on saving has some downsides for Dollar General, though. The company’s core lower-income consumers have been financially squeezed, Vasos said. The company gained market share in some categories, but sales of seasonal home goods and apparel were sluggish, he said.
“Many of our customers report that [they] only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities,” Vasos said.
Expanding home delivery is part of Dollar General’s plan to build its customer base. About 400 stores currently offer delivery through a partnership with DoorDash (DASH), and the option may be available at 10,000 stores by the end of the year, Vasos said.
While Walmart (WMT) and Target (TGT) have made inroads with delivery services, Dollar General will stand out, Vasos said, because it can quickly get goods to rural residents. And Dollar General delivery orders are larger on average than what customers spend in store and could lead to improved loyalty.
“There is no one out there today that can deliver to small-town rural America within an hour,” Vasos said. “We can do that.”