Don’t blink! You might miss the grand opening of another Dollar General store. OK, that’s an exaggeration. But not by much.

In the 14 years since an investment group purchased the family owned business and took it public again two years later, the Goodlettsville-based chain has added nearly 10,000 stores to boast more retail locations than any other company in the United States – quickly closing on 18,000 stores in 46 states.

And Dollar General’s aggressive expansion plan shows no signs of slowing. The company plans to double the number of locations, which mostly dot the highways and byways of rural America.

Not even the 2020 COVID-19 pandemic, which negatively impacted much of the U.S. economy, could impede the company’s growth. Nearly 500 stores have been added since the end of fiscal 2020, with more on the way every day.

“Dollar General has lots of smart people that are making their forecasting decisions and are thinking about the market sizing and the rationale behind the expansion,” says Kelly Goldsmith, a professor of marketing at Vanderbilt University.

“I don’t think they would be making these types of decisions if they didn’t have good insight into demographic trends. So, you know, different segments of the population are growing and others are shrinking.”

DG officials are tight-lipped about the company’s growth, communicating through quarterly fiscal reports or press releases, but Goldsmith and University of Tennessee Haslam College of Business professors Don Bruce and Paul Dittman shared their insights into Dollar General’s past, present and future growth.

Bruce says “convenience really matters” in Dollar General’s selection of locations, and that has become even more obvious in the pandemic era of increased online shopping.

“People will not go out of their way to get something in-person if they can get it quickly online. That certainly took over in 2020,” says Bruce, the associate director of UT’s Boyd Center for Business & Economic Research. “And what I see happening with Dollar General – and I see it happening even in my neighborhood – is that they are very well aware of that.

“What we have to think about with Dollar General is they’re seeing what happened and they’re filling an obvious niche. They’re filling a gap in the marketplace,” Bruce adds.

“They find a stretch of highway with nothing else around and they make sure they’re on the commuting route for a lot of people who live around that area who are going to pass by their store every single day.

“I’ve seen them build two stores within 2 miles of each other – within two years – that just happened to be on different sides of a rural highway. People are that interested in convenience, but they’re not going to cross flow of traffic to get into the other one.

“They’d rather go on down the road a couple more miles. They’re going to pass it anyway and just pull in on the right, easy on, easy off. Remember the old signs for the gas station? They were marketing the convenience factor.”

Dittman, the Haslam College of Business assistant department head for Supply Chain Management, says the “retail apocalypse” of store closings experienced during both the 2008 recession and the current pandemic doesn’t seem to have affected Dollar General.

“I’ve read a number of articles about the retail apocalypse, that retail’s going to die because of online. And COVID gave it a jump-start in the sense of advancing 10 years in one year toward that goal,” Dittman says.

“Certainly, it is true that a lot of retailers have died. There’s long list of retailers who have died. So the retail apocalypse, I think, is real, but apparently not for Dollar General. Their customers must love to shop physically in stores, is all I can think of.

“I’m not quite sure why. Maybe it’s the market areas they serve,” Dittman adds.

Dollar General’s locations are largely rural with customers that seem less likely to shop online.

“I guess Dollar General is serving a large group of people who want to buy that way – want to physically walk in a store and buy something,” Dittman says.

“Obviously, that’s huge and getting rapidly bigger. It may be a demographic thing, I’m not sure. It could be the younger people are more receptive to that than older people. You would certainly think the trend is to do more and more and more of that kind of shopping. It’s obviously huge and growing.

“That is Dollar General’s niche. They are serving something else and apparently they’re very successful with it,” he adds.

During a May 27 conference call to announce first quarter financial results for fiscal year 2021, Dollar General CEO Todd Vasos and COO Jeff Owen both expressed optimism about long-term growth.

“Our first quarter results exceeded our expectations, reflecting strong underlying performance across the business, which we believe was enhanced by the most recent round of government stimulus payment. Given our first quarter outperformance, we are raising our financial outlook for fiscal 2021,” said Vasos, who has led the company since 2015.

“Looking ahead, we are excited about our plans and believe we are well-positioned to continue delivering long-term sustainable growth and value for our shareholders.”

Owen doubled down on his projections of retail growth, reminding one of that Bachman-Turner Overdrive hit, “You Ain’t Seen Nothing Yet” with his assessment.

“We estimate there are now approximately 13,000 additional small-box store opportunities in the continental U.S. which are available for a Dollar General store,” Owen said in that May conference call. “This compares to our prior estimate of nearly 12,000 opportunities and is inclusive of our 2021 new unit pipeline.

“Although these opportunities are available to all small-box retailers, as a leader in small-box retail, combined with our proven track record of new-unit development and format innovation, we believe we are well-positioned to capture a disproportionate share.”

Vasos, Owen and other company executives will deliver the company’s second quarter 2021 fiscal report in a conference call Thursday (Aug. 26), and it will be interesting to hear if or how their forward-thinking views have changed.

That said, here’s a brief look at the company’s past, present and future.

That was then …

Dollar General’s roots go all the way back to 1939 with the founding of J.L. Turner and Son in Scottsville, Kentucky, the typical general store of that era. J.L. and son Cal invested $5,000 each to open the dry-goods store.

Its success meant the first wave of expansion and by the mid-1950s – when the company name was officially changed to Dollar General – they were operating three dozen stores in Kentucky and Tennessee.

The company went public in 1968 with reported annual sales of $40 million and net income topping $1.5 million

Cal Turner Jr., succeeded his father as company president in 1972, a position he held until his 2002 retirement. He led the company’s move to Goodlettsville in 2000. By then, the company had grown to some 8,000 locations with sales exceeding $4 billion.

In 2007, the company was acquired by an investment group for a total enterprise value of approximately $7.3 billion, a news release on the company’s website states.

pOpShelf is Dollar General’s concept for selling items $5 or less, both in standalone locations and within the company’s traditional stores.

-- Photograph Provided

The first major move made by that investment group – which included affiliates of Kohlberg Kravis Roberts, GS Capital Partners, Citigroup Private Equity and other partners – was to cease trading on the New York Stock Exchange.

This is now …

When the new owners returned to the NYSE on Nov. 13, 2009, Dollar General was priced at $22.43 per share. Shares were at $236.76 following Friday, Aug. 13, close, an increase of 941.62%.

In 2019, Dollar General had reached 16,278 stores in 44 states, and by the end of fiscal 2020 – despite the COVID-19 pandemic – DG logged 17,177 stores in 46 states, an increase of 899 stores and two states.

During the first quarter of 2021, Dollar General announced it had opened 260 new stores, remodeled 543 stores and relocated 33 stores for a total of 17,426 stores as of April 30.

Even more recently, the data company ScrapeHero reported that as of Aug. 8, Dollar General had 17,671 stores. For those keeping score, that’s another 405 stores in less than four months.

In July, a Supermarket News report of the Top 50 U.S./Canadian retailers had Dollar General (17,266 stores) ranked No. 1 and Dollar Tree (15,685) No. 2. A distant third was 7-Eleven (13,839) followed by Alimentation Couche-Tard (9,978) and CVS (9,960).

While Dollar General’s rural America expansion has its admirers, detractors blame the loss of small, local businesses to Dollar General and other major corporations, including Amazon and Walmart. The experts don’t necessarily agree.

“I don’t think we can blame Dollar General in 2021 for what happened to local retail in the last 20 years,” UT’s Bruce says. “If we’re going start blaming a major corporation for the loss of local business, I think we need to step back a couple of steps and look at the bigger box retailers.

“Look at the online vendors that have had a huge tax advantage for so long. Those are far, far more guilty culprits with this whole trend in local retail than Dollar General ever will be.”

The growth of online shopping is a factor, the experts agree, but note that some people prefer the in-person experience and lower prices of Dollar General and the other low-end retailers. Similarly, in May, rival Dollar Tree reported its “strongest quarterly same-store sales” since 2017.

DGX is Dollar General’s take on urban convenience stores. This one is at West End and 21st Avenue North across from Vanderbilt University.

-- Photograph Courtesy Of Dollar General

“One thing that’s also interesting to consider is during the pandemic so many people became online shoppers,’’ Vanderbilt’s Goldsmith explains. “Whether or not they were before certainly a massive number of people that were previously shopping offline then changed to become online shoppers for some, if not all, of their purchases.

“Maybe people are just kind of looking for something new to do and that opens up a door for Dollar General who offers people a positive retail experience at an affordable price point.”

Adds UT’s Dittman: “It brings to mind a comment by one of these famous management gurus, Michael Hammer, who said, ‘In 20 years’ – and this is probably 20 years later now – he says, ‘Retailing will exist only as a social experience.’

“In other words, the only reason to get out of your home and go to the store is for the social experience of being around other people. And that’s pretty close to being true now.

“Given Michael Hammer’s comment, I think there was a lot of truth to that. Well, in fact, it has come true. When you think that you can buy literally anything online now and … have it very conveniently delivered to your door … in a couple of days, that’s really kind of obsolete in retail but apparently not for Dollar General, I’ll tell you that.”

Beyond the traditional stores, the Dollar General umbrella covers DG Fresh Market (a grocery with fresh meats and vegetables), the DGX urban convenience stores, the pOpshelf ($5-below) brand, and the recent debut of a store-within-a-store, pairing DG Market and pOpshelf in one building.

The first of those hybrids held its grand opening July 31 in Hermitage at 4491 Lebanon Pike, along with another in White House. There are also two standalone pOpshelf stores, including one in Hendersonville.

In addition, there are more than two dozen Dollar General distribution centers, both dry goods and the DG Fresh stores, across the country to keep store shelves stocked. The most recent one opened in late July in Walton, Kentucky.

Fresh produce is a draw for rural Dollar General customers, many of whom face long drives into the nearest town to shop in a traditional grocery setting.

-- Photograph Courtesy Of Dollar General

“The other thing I think is critically important is this express downtown urban version that has the groceries. And even some of the rural locations. We still have food deserts in certain parts of the country and certainly in Tennessee where it’s hard for people to get access to good food and fresh food,” UT’s Bruce says.

“You’re seeing it with Walgreens. I think they’ve partnered up with Kroger; you walk into Walgreens now (and) you see produce and some meats. You’ll see it with these urban concepts, these smaller format concepts. They are able to take advantage of their supply network, their distribution network and get limited amounts of product closer to people who need them.

“It’s tempting to look at that and say they’re competing out the local business but in many of those cases, there weren’t local options. Dollar General is kind of filling that space.”

The future and beyond

Thursday’s second quarter conference call with DG officials should shed light not only on the 2022 forecast but also could speak to the next decade of expansion.

How will the resurgence of the pandemic affect plans? The U.S. economy seems strong right now, but will it last or are we headed for a depression because of China and other nations’ economic woes? What other economic trends, or political ones, will play a role in Dollar General’s growth? There are also natural disasters and potential supply chain disruptions to consider.

“Supply chain shortages have affected most retailers,” Vanderbilt’s Goldsmith notes. “I hope for Dollar General’s sake that they have been relatively immune to the supply chain issues. But they do seem to be very far-reaching in terms of the industries and retailers they’ve affected.”

Adds UT supply chain expert Dittman: “The supply chain is evolving rapidly. As I said before, probably 10 years of change in one year, given COVID. There’s a lot of fundamental trends that are changing,”

After discussing global economies, conversations with the three experts shifts to the far-flung future, space exploration and how it might affect companies like Dollar General. Once the realm of science fiction, the commercial Space Age is now reality.

A February article in Harvard Business Review by Matt Weinzierl and Mehak Sarang explored the subject private space travel in detail, writing, “For the first time in human history, humans accessed space via a vehicle built and owned not by any government, but by a private corporation with its sights set on affordable space settlement. It was the first significant step towards building an economy both in space and for space. The implications – for business, policy, and society at large – are hard to overstate.”

Then I told the expert trio about a funny meme making the rounds on Facebook. It was a photo of a Martian landscape – with a Dollar General store in the foreground. All three laughed and agreed anything is possible.

“It’s getting closer to reality, for sure. I think there are pretty substantial barriers there but, you know, I’ll stick to the current-era economics for now,” Bruce says.

Dittman says it might be a good time to “buy real estate futures on Mars. You just never know.” But Goldsmith isn’t ready to take that investment plunge.

“I think that’s probably still a ways off,” she says, “but it’s fun to think about that maybe Dollar General to be one of the first.”

Who knows what the future holds? It’s difficult to peer into the future and get it right. The Jetsons had flying cars; I’m still waiting for mine. In the 1968 movie 2001: A Space Odyssey, there was a Hilton Hotel on the moon. Another miss.

Still, look how far Dollar General has come in its first 82 years of existence.

Another 82 years, in 2103, will private companies be setting up shop on the moon, Mars and beyond?

“What we’ve always seen are the mega-entrepreneurs, the titans of industry … the big names through history have always done things like this and have taken risks and try to visibly show the power of innovation and technology when we least expect it,” Bruce explains.

“I think we’re getting a different wave of that technology now with people’s space flights. It will be curious to see what we actually do with that information, whether we cross that boundary sooner than later.”