Expanding Popshelf Concept: Dollar General Accelerates Growth
Dollar General, the popular discount retailer, announced its expansion plans for the new store concept, Popshelf, in 2021. The retailer aimed to rapidly grow the new store concept, which was launched in October 2020, focusing on higher-margin, non-essential household goods, targeting primarily "suburban moms" with trendy and elevated items mostly under $5.
According to the plans, Dollar General intended to open 50 free-standing Popshelf locations and add 25 Popshelf store-within-a-store locations inside Dollar General Market stores. The free-standing Popshelf stores would cover around 8,500 square feet of sales space, with more cooler capacity, extended queue lines, produce in select stores, and a larger health and beauty section.
However, as of 2024, Dollar General decided to discontinue the Popshelf store-within-a-store format because the demographics of Dollar General Market shoppers did not align with Popshelf's target customers. Instead, they focused on updating the free-standing Popshelf stores with an expanded product offering and a new loyalty rewards app.
In terms of financial performance, Dollar General's sales for the full fiscal year increased by 21.6% year over year to $33.7 billion. The retailer's net income for the full fiscal year was nearly $2.7 billion. Despite this growth, Dollar General's 2021 guidance predicts same-store sales to decline 4% to 6%.
On a two-year stack, Dollar General's sales are expected to represent an increase of 10% to 12%. This forecast is based on the comparison with the retailer's performance in 2019, as suggested by Saunders.
In the fourth quarter, Dollar General's sales jumped by 17.6%. GlobalData Managing Director Neil Saunders expects strong underlying growth for Dollar General in 2021, attributing much of the success to Dollar General's expansive footprint that places stores in convenient areas for rural and other shoppers.
Most items at Popshelf are priced below $5 and span seasonal, home decor, beauty products, cleaning supplies, and party goods. Popshelf's merchandising approach includes a combination of continually-refreshed merchandise, seasonal specials, and limited-time items.
Dollar General executives expect a slowdown in sales as the vaccine rollout reshapes shopping. Despite this, the retailer estimates it could add up to 3,000 additional Popshelf stores in the continental U.S. in the future.
[1] Source: Business Insider, Yahoo Finance, and Dollar General's financial reports.
- The retail industry witnessed Dollar General's plans to expand Popshelf, their new store concept, in 2021, with an emphasis on health and beauty products and seasonal items.
- Despite the demographics mismatch, Dollar General continued to focus on improving the free-standing Popshelf stores, enlarging the product offering and introducing a new loyalty rewards app.
- In the AI-driven finance sector, Dollar General's sales for the full fiscal year increased significantly, reaching $33.7 billion, accompanied by a net income of nearly $2.7 billion. However, their 2021 guidance indicates a potential decline of 4% to 6% in same-store sales.
- Looking ahead, Dollar General expects a gradual decrease in sales as the pandemic subsides and vaccinations become widespread, yet they envision the potential addition of up to 3,000 Popshelf stores in the near future.