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Dollar General, the famous discount store chain, announced that it will open a new store concept that seeks to attract customers with more purchasing power. In the new stores, most of the items will sell for around $ 5 or less. This will give the chain the opportunity to make more profits at a time when inflation in the country is reaching its highest levels in 30 years.
For this reason, Dollar General will seek out the wealthy people of the suburbs. Its new outlets, called Popshelf, debuted on a trial basis in some cities last year. Now will be implemented nationwide with 1,000 branches in higher-income areas where annual household income is as high as $ 125,000the company said Thursday.
By way of comparison, the typical Dollar General customer at one of its traditional dollar stores would be a person who lives in a rural area and has a median income of about $ 40,000, according to the New York Post.
The announcement of the new concept came as Tennessee-based Dollar General said its annual earnings would likely fall below expectations, sending its shares down nearly 4%.
Analysts believe Dollar Tree is now targeting wealthier clients because it has already recruited the most low-income people, all of whom have been affected by inflation., particularly due to the increase in fuel prices. The annual inflation rate reached 6.2% in October, its highest level in more than 30 years.
“Given the sustained and positive performance of our Popshelf concept, we plan to further accelerate the pace of new store openings as we move forward,” CEO Todd Vasos said in a statement. Vasos indicated that stores should be mostly open by the end of 2025.
There are currently about 36 Popshelf stores out of 17,683 Dollar General locations in the US These stores sell home decorations, seasonal products, beauty and cleaning supplies, as well as party supplies.
Dollar General also announced that it will open its first stores outside the United States next year, which will be 10 stores in Mexico..
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.