Dollar General's positioning is to offer pricing 20-40% lower than grocery and drug stores, focusing on the cost-conscious niche, but don't discount the beauty opportunity. With a footprint of 16,094 stores, the retailer is a force to be reckoned with.

“Their business model is nimble and focused on what customers want; that’s made them a very popular destination not just for low-income customers, but lots of other Americans,” Neil Saunders, Managing Director of GlobalData Retail, told Digiday. “They are a savvy operator, and their growth has been quite phenomenal.”

A Snapshot:

• Dollar General had $25.6 billion in sales in fiscal 2018, a 9% increase year over year.
• Dollar General has reported 29 consecutive years of growth. In its fourth-quarter results, reported earlier this month, same-store sales were up 4%.
• In 2017, Dollar General opened new locations at a rate of around four stores a day. In 2018, it opened 900 stores, and in 2019, it plans to open 975 and remodel another 1,000. As of November 1, 2019, the footprint was 16,094 retail locations.

The Customer:

• The company's core customers make about $40,000 a year per household, more than $20,000 below the national average.
• Dollar General customers only spend around $10 to $12 on average when they shop.
• "Consumers across all income levels want the same thing—convenience, innovation, speed and value," said Joseph Feldman, analyst at Telsey Advisory Group.

Winning Model:

• Dollar General’s biggest differentiator is serving markets that had been vastly underserved. Seventy-five percent of Americans live within five minutes of a Dollar General, according to research from GlobalData Retail.
• Merchandising assortment includes value items from national brands that aren’t necessarily at the strict $1 price point, attracting higher-income customers.
• They currently have 40 unique private-label lines with plans to continue rolling out new proprietary products as it expands with new locations.
• Store designs that are easy to navigate.
• They are rolling out in-store tech, including a scan-and-go payments app called DG GO!
• Looking to e-commerce models to inspire their evolving strategies.
• Rolling out a buy-online-pickup-in-store option.
• They are creating a local destination for residents’ many needs. FedEx drop-off and collections locations will be added to more than half of its stores by the end of 2020.
• Dollar General has been expanding its private fleet, taking greater control of its supply chain.

Beauty Matters:

• Their aisles are full of brands like Maybelline, Garnier, and Olay.
• Last December the retailer launched 20 topical CBD products priced at $20 and below.
• Their 140-SKU private-label color brand Believe Beauty launched last spring went viral.
• Dollar General's annual Day of Beauty held at Music City Center in downtown Nashville, Tennessee, is similar to events hosted by specialty beauty retailers, with celebrities, influencers, samples, and education.
• In 2018 the retailer launched DG Crew, a private-label subscription program for razors and cartridges reminiscent of Dollar Shave Club.

The History:

• The company was acquired by private-equity firm KKR in 2007 for $6.9 billion. At the time, the company was struggling and saddled with $380 million in debt. It went public in 2009.