Dollar General ppt
3/12/15
Dollar General
Jacky Akpan
Taha Kermalli
Allison Schumacher
Anlin Wang
1
Dollar General, 2007
● Quality consumer goods in select categories
● Focused inventory on fastest-turning SKU’s
● Targeted demographics ignored by Walmart
Store
Dollar General
Walmart
Square Feet
6,900
100,000
SKU’s
4,900
75,000+
~20,000 or less
50,000+
Surrounding Populations
2
1
3/12/15
Pricing and Brands
● 30% of products priced at $1 or less
● Majority of products under $10
Brands
Name Brands (30%)
Private- Label Brands (12%)
3
Industry History: Five-and-Dime Model
● Pioneered by Woolworth’s, founded in 1878
● Merchandise was offered at two price points: either a nickel or a dime o Due to inflation, they later became known as variety stores
● Large discount stores, including Kmart and Target, had great success in the 1960’s and 1970’s
● Dollar store segment began to grow significantly again in the 1990’s when the industry broke away from its fiveand-dime roots.
4
2
3/12/15
Dollar Store Segment: Subcategories
1. Single-price-point retailers: every item is $1 or less
● Dollar Tree, 99 Cents Only
1. Closeout retailers: overstock, discontinued, surplus, and/or distressed merchandise ● Big Lots, Tuesday Morning
1. Limited assortment grocery retailers: small selection of (mainly privatelabel) grocery items
● Save-A-Lot, Aldi
5
Dollar Store Segment: Subcategories
4. Extreme-value retailers: offer everyday low prices in a small-box format
● Focused assortment of goods
● Nationally branded products
● Compete on convenience and price
● Many $1 items, others up to $10 or $15 o Dollar General, Family Dollar
6
3
3/12/15
Extreme-Value Retail: Porter’s Analysis
Threat of Potential Entrants: High
● Low barriers to entry
Bargaining Power of
Suppliers: Medium
● Suppliers sell to many merchants
Rivalry Between Competitors: Medium
● Dollar General
● Family Dollar
● Dollar Tree*
● Wal-Mart*
Bargaining Power of Buyers: High
● No switching
Dollar General
Jacky Akpan
Taha Kermalli
Allison Schumacher
Anlin Wang
1
Dollar General, 2007
● Quality consumer goods in select categories
● Focused inventory on fastest-turning SKU’s
● Targeted demographics ignored by Walmart
Store
Dollar General
Walmart
Square Feet
6,900
100,000
SKU’s
4,900
75,000+
~20,000 or less
50,000+
Surrounding Populations
2
1
3/12/15
Pricing and Brands
● 30% of products priced at $1 or less
● Majority of products under $10
Brands
Name Brands (30%)
Private- Label Brands (12%)
3
Industry History: Five-and-Dime Model
● Pioneered by Woolworth’s, founded in 1878
● Merchandise was offered at two price points: either a nickel or a dime o Due to inflation, they later became known as variety stores
● Large discount stores, including Kmart and Target, had great success in the 1960’s and 1970’s
● Dollar store segment began to grow significantly again in the 1990’s when the industry broke away from its fiveand-dime roots.
4
2
3/12/15
Dollar Store Segment: Subcategories
1. Single-price-point retailers: every item is $1 or less
● Dollar Tree, 99 Cents Only
1. Closeout retailers: overstock, discontinued, surplus, and/or distressed merchandise ● Big Lots, Tuesday Morning
1. Limited assortment grocery retailers: small selection of (mainly privatelabel) grocery items
● Save-A-Lot, Aldi
5
Dollar Store Segment: Subcategories
4. Extreme-value retailers: offer everyday low prices in a small-box format
● Focused assortment of goods
● Nationally branded products
● Compete on convenience and price
● Many $1 items, others up to $10 or $15 o Dollar General, Family Dollar
6
3
3/12/15
Extreme-Value Retail: Porter’s Analysis
Threat of Potential Entrants: High
● Low barriers to entry
Bargaining Power of
Suppliers: Medium
● Suppliers sell to many merchants
Rivalry Between Competitors: Medium
● Dollar General
● Family Dollar
● Dollar Tree*
● Wal-Mart*
Bargaining Power of Buyers: High
● No switching