Dollar General has become one of the most profitable retailers in the country thanks to its convenient locations and products priced for lower-income consumers, the Wall Street Journal reports.
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The discount chain's unique business model is exactly what has helped it flourish in the retail sector. Far from shuttering its doors, the brand is expanding its presence across the U.S. with thousands of new stores planned to open in the coming months.
While the American economy is healthy and continues to expand, not all are thriving. In areas such as Rhea County, Tennessee, more than one in five people receive government food assistance, the WSJ reports. But it is in rural areas such as Rhea County that Dollar General is performing best.
The company continues to prosper because its products cater to a demographic in need of low-cost items; the average Dollar General shopper comes from a household that earns $40K or less per year. The chain's choice of locations is equally strategic. Stores are specifically situated a safe distance from Walmart stores to ensure competition from the retail giant will not be an issue.
With 14,000 stores across the country, Dollar General's profits are twice that of Macy’s Inc. Dollar General, valued at $22B, has a larger market share than Kroger Co., which operates on five times the revenue.
While it is excelling in rural areas, Dollar General has yet to make its way into urban areas. Last year it bought stores in Brooklyn and Chicago, among others, but plans for metro expansion remain limited.
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