Dollar General plans to invest heavily in its real estate portfolio next year, remodeling or renovating more than a fifth of its 20,000-store network.
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The discount retailer said Thursday it plans to carry out about 4,885 real estate projects through its fiscal year ending in January 2026. This includes about 575 new U.S. stores and 15 in Mexico, fully remodeling 2,000 stores, and carrying out "lighter touch" renovations at 2,250 locations while relocating 45 others.
Dollar General's planned remodeling campaign would more than double its projects in the fiscal year, although its pace of new store openings is set to drop from a projected 730 in 2024.
"We are excited about our significant increase in planned real estate projects for 2025," Dollar General Chief Financial Officer Kelly Dilts said in a statement. "In particular, we are enthusiastic about Project Elevate, which introduces an incremental remodel initiative within our mature store base."
The Project Elevate initiative consists of a lighter remodel of stores that aren't old enough for a full remodel but could still benefit from "customer-facing physical asset updates," expansions and optimizations, Dilts said.
Tennessee-based Dollar General's expanded renovation efforts come as its profitability declines. In the third quarter, the company's net income fell by 29% year-over-year, from $276.2M to $196.6M.
But Dollar General's expansion comes as some of its discount chain competitors are trimming their portfolios amid a challenging retail environment in a business that operates on slim profit margins.
California-based 99 Cents Only Stores announced it was closing all of its 371 stores and liquidating its merchandise in April.
Rival chain Dollar Tree in March announced its plan to close 1,000 stores after taking a $1.7B quarterly loss. Since then, the company has closed about 670 stores, and as of November, it expected to close 25 more before the end of the year, according to a press release. Dollar Tree reported a 7.6% increase in profit for Q3.
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