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Dollar General Plans To Open 1,000 More Upscale Stores In Chase For Wealthier Customers

A rendering of the checkout area in pOpshelf, Dollar General's new, more upscale retail concept.

Dollar General is going all-in on a new store concept aimed at more affluent shoppers.

The prolific discount retailer, which operates 18,000 stores across the U.S., plans to roll out 1,000 locations of its pOpshelf concept by the end of fiscal 2025, CNBC reports. The huge expansion comes just a year after Dollar General introduced pOpshelf in Nashville.

The stores, which generally range around 9K SF and carry more household and home décor items than standard Dollar Generals, target suburban women with annual household incomes between $50K and $125K, Dollar General Chief Merchandising Officer Emily Taylor told CNBC. Traditional Dollar General stores tend to focus on rural areas, targeting customers earning $40K a year or less with a higher mix of grocery and snack items.

The move comes as Dollar General and convenience retailers attempt to chase more affluent customers around urban markets. As Bisnow previously reported, upscale convenience store concepts are expanding across the globe with the likes of Foxtrot, 7-Eleven's Evolution concept and Aldi's Corner Store.

While dollar stores expanded rapidly since the Great Recession, operators are now facing margin pressures due to inflation pressures on product pricing. Dollar Tree recently announced it would raise its product prices to $1.25.

GlobalData Retail analyst Neil Saunders noted that Dollar General's profits as a proportion of sales have dropped from 7% to 5.7% this year, Insider reports. While Dollar General's sales were up $8.2B in the third quarter from a year ago, the discount retailer saw net income drop from $574.3M to $487M, and it is projecting a same-store sales decline of up to 3% in 2022.