The retailer sells to a largely underserved audience of low-income families and individuals. It offers small quantities of items like toilet paper and other necessities because its customers may not be able to afford traditional packages even if the overall cost per use is cheaper. Dollar General has prices that are generally fair even if buying in higher quantities from Walmart or a grocery chain may cost less per serving/use.

This retailer knows its customer and it knows real estate. It generally opens at least 1,000 stores each and renovates slightly more than that. Significant room to grow remains despite Dollar General’s large footprint. The company explained its growth model in its 2020 annual report.

Our proven high-return, low-risk real estate growth model, coupled with ongoing format innovation, has generated a unique footprint of more than 17,000 stores, resulting in approximately 75% of the U.S. population living within five miles or less of one of our stores. In 2021, we plan to open 1,050 new stores, remodel 1,750 stores and relocate 100 stores as we continue to expand our ability to serve new and existing customers.

Dollar General is laser-focused on managing its cost structure. That includes using its scope and scale to negotiate better deals and buy items at prices very few retailers can equal. The chain has also focused on keeping its employee count low. This has led to some technology investments, including self-checkout in roughly 10% of its stores (with plans for more to be added this year and going forward).

Mostly, however, Dollar General has been about steady, relentless growth in store count. That makes sense because management knows exactly how much revenue and profit each new location brings in while also understanding how every 1,000 new stores improves its supply chain and buying power.