Dollar Tree and Dollar General Opening Stores by the Hundreds
While many retailers have scaled back their 2020 store opening plans amid the coronavirus pandemic, Dollar Tree and Dollar General reaffirmed their commitment to open hundreds of stores.
Dollar Tree, which owns both Dollar Tree and Family Dollar, said it still expects to open 500 new stores in fiscal 2020, although this is a drop from its original plan of 550 openings. The openings include 325 Dollar Tree stores and 175 Family Dollar stores, a reduction of 25 planned stores for each banner.
Dollar General said it remains committed to opening 1,000 new stores and 80 store relocations in fiscal 2020.
The expansion plans come at a time when Coresight Research, which tracks retail openings and closings, has upped its projected store closures for 2020 from 8,000 at the beginning of the year to 15,000 at the beginning of March to about 25,000 now.
Americans have filed more than 40 million claims for jobless benefits in the past 10 weeks, according to new Labor Department data. As shoppers become more budget conscious and concerned with social distancing, Dollar Tree, Family Dollar and Dollar General are appealing both in the retailers’ low prices and smaller physical size.
“You think about that small box that we offer, that’s a 7,200-7,400 square-foot-box, she can shop that with convenience and with confidence that there won’t be crowds,” Dollar General Corp. CEO Todd Vasos said.
Both Dollar General and Dollar Tree reported first quarter 2020 earnings and sales that exceeded expectations.
Dollar General’s net income surged to $650 million, or $2.56 a share, in the quarter ended May 1, up from $385 million, or $1.48 a share, in the year-ago period. Analysts had expected earnings of $1.75, CSA reports. Sales rose 27.6% to $8.4 billion, beating Street estimates of $7.6 billion. Same-store sales rose 21.7%, well ahead of estimates.
Dollar Tree reported adjusted earnings per share of $1.04, for the quarter ended May 2, down from $267.9, $1.12 per share, in the year-ago period, but analysts had expected earnings per share of $0.85, CSA reports. Consolidated net sales increased 8.2% to $6.29 billion, while analysts had expected sales of $6.14 billion. Total same-store sales for Dollar Tree increased 7.0%, while same-store sales for Family Dollar jumped 15.5%.
The Retail Tech Driving Contactless Service
Dollar General’s DG Pickup, its buy-online-pickup-in-store (BOPIS) is providing its customers with a contactless customer experience, the retailer notes.
“We launched the pilot of this solution at the end of Q4 and are very pleased with the initial results including positive feedback from both customers and employees,” said Vasos. “Importantly, we are well positioned to scale quickly with plans for rapid expansion as we move ahead.”
While DG’s BOPIS is just getting started, Vasos noted the repeat use after the first time a shopper tried it was “very, very heavy.”
“I am so proud of the team and their efforts over the last couple of years, because they have set us up for success during this time and will flourish as we go forward,” he continued. “So, more to come as we aggressively roll out BOPIS in the upcoming months and quarters ahead, because we know that the customer is really looking for that option inside of a brick-and-mortar retailer.”
Beyond DG Pickup, DG GO! mobile checkout is available in around 750 stores with plans to further expand as DG looks to combine this feature with self-checkout providing an even more contactless checkout solution.
On the Dollar Tree side, the retailer said stores are now equipped with contactless payment through tap-to-pay with Visa, MasterCard, Apple Pay and Google Pay. It has also installed plexiglass guards at the check lane in all stores to protect shoppers and cashiers.
“We are committed to meeting or exceeding all relevant local and state requirements,” Dollar Tree Inc. enterprise president Mike Witynski said. “By taking these steps, we have been able to keep all stores open as an essential business.”