Dollar General Corporation, headquartered in Goodlettsville, Tennessee, is an aggressive competitor in the deep discount retail industry, fighting for position with other stores such as Family Dollar, Fred's, 99 Cents Only Stores, and Dollar Tree, as well as with retailers such as Wal-Mart, Kmart, CVS, and Rite Aid. Dollar General stores offer a product line of general merchandise that includes housewares and cleaning supplies, health and beauty aids, clothing, packaged food, stationery, seasonal offerings, and other household consumables. The company has been operating since 1939.
Dollar General's most recent annual sales figures total $8.6 billion, placing the chain at the top of the dollar store category of discount retailers. Somewhat surprisingly, the chain is not achieving its success by following the example set by other successful discount retailers. Whereas competitors such as 99 Cents Only Stores consider middle- and high-income customers to be key contributors to their profits, Dollar General caters specifically to customers with low, middle, and fixed incomes. According to data from AC Nielsen, in 2005 48% of Dollar General's customers earned less than $30,000 per year, and 26% earned less than $20,000.
Dollar General has kept away from the big box supercenter store model used by Wal-Mart and Kmart. This type of store is often located on the outskirts of cities or outside of particular towns to draw customers from a broad area. When placing new stores, Dollar General prefers to locate them within communities, often targeting municipalities that are home to fewer than 20,000 residents. In early 2006, over 4,500 Dollar General stores were in such communities. The company believes that filling the role of neighborhood store is a big part of its success. As such, stores follow a fixed, even-dollar pricing schedule with about one-third of all merchandise priced at $1 or lower. The maximum price for... [continues]
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