Six tips for building a mutually beneficial partnership with the value retailer.
With inflation continuing to keep U.S. shoppers closely tracking their budgets, Dollar General is being cautious about growth expectations and taking a “back to basics” approach to the store base, focusing more heavily on renovation and reinvention than expansion.
Of course, most retailers would love to “settle” for Dollar General’s scaled-back expansion plans. Already one of the nation’s largest chains, with more than 21,000 stores in 48 states, Dollar General will “only” open 450 stores in fiscal 2027 as it places greater emphasis on a two-pronged renovation plan designed to simultaneously improve the customer experience and operational efficiencies.
At the heart of Dollar General’s efforts sits the goal of reinforcing its position as an indispensable grocery option for America’s Heartland, the underserved rural communities that comprise most of the customer base (and give the retailer’s retail media business a fairly unique audience to offer brand partners). Approximately 80% of stores are located in towns with populations of 20,000 or less.
During the company’s most recent earning call, CEO Todd Vasos outlined the progress being made against the four strategic growth pillars designed to drive long-term sustainable growth and create value for shoppers:
Enhancing the Customer Experience: Looking to become a stronger retail destination for rural shoppers who often have few grocery options, Dollar General continues to add fresh produce, with plans to add 200 more locations this year. But it’s also moving into more non-consumable product categories like home goods and toys to create “a sense of newness and excitement” in stores, Vasos said.
The retailer is also taking steps to “further enhance the omnichannel customer experience” through enhancements to its shopping app and the ongoing rollout of on-demand delivery services, the latter of which is “an important complement to our expansive physical store network and continues to be a key driver of incremental value and convenience for our customers,” Vasos said. The “DG Delivery” service run by DoorDash is now available through 18,000 stores.
The plan also features ongoing improvements to the DG Media Network, “which enables a more personalized experience for our customers while delivering a higher return on ad spend for our partners,” said Vasos. Upgrades here include “accelerating onsite performance through improved search, sponsored products, and a stronger ecommerce experience while expanding our ability to capture emerging offsite spend across social, connected TV, and video,” he said. “We’re also creating more opportunities for advertisers to participate inside our stores.”
Elevating the Dollar General Brand: With such a massive physical footprint and a still-nascent ecommerce business that’s driven largely by the on-demand delivery initiative, elevating the brand is heavily focused on store upgrades. This year, roughly 2,000 stores will undergo complete “Project Renovate” overhauls to add or replace coolers and upgrade to the latest store format. And 2,250 will receive “Project Elevate” updates involving changes to physical assets, merchandising assortments and adjacencies, and category refreshes.
Driving Greater Enterprise-Wide Efficiencies: Supply chain productivity, simplification of store operations, inventory optimization, and increased use of artificial intelligence are among the initiatives being implemented “to drive greater efficiencies while lowering costs across the organization,” according to Vasos. “While we are still early in our AI journey,” a planned enterprise-wide AI operating system will deliver internal efficiencies but also “improve how we engage with customers and how they shop with us,” he said.
Extending Reach: “We continue to extend our unique combination of value and convenience to new communities across the country,” said Vasos, in discussing a goal that will be achieved through many of the initiatives already mentioned. Dollar General opened 190 of the 450 planned new U.S. stores in the first quarter. It also unveiled five Mi Súper Dollar General stores in Mexico, where it already operated 16 locations.
Looking ahead, Dollar General’s strategic push toward becoming a stronger grocery destination was underscored in March when the company announced a successor to the retiring Vasos: former Ahold Delhaize USA CEO JJ Fleeman will take the reins in January 2027.
Keys to Success
For brands seeking to build a strategic partnership with Dollar General and a winning engagement strategy for the value retailer’s unique shoppers, the following six recommendations could be crucial to success:
1. Recognize the Footprint: With over 20,000 stores in 48 states, activation at Dollar General can require a significant investment.
If your budget is limited, maximize impact by evaluating which stores/regions to support. Focus on more relevant markets or regions, and execute against weather-driven opportunities or regional holidays. Also look to align media campaigns with stores that are carrying secondary displays to maximize sales lift. (FYI: 50% of website/app users visit a store within two days.)
2. Get the ‘Four Ps’ right: The first three are Product, Pack, and Price. Some CPGs tailor their pack types and sizes to give Dollar General SKUs it can price effectively for its shoppers. These unique pack types can increase both trip frequency and basket size.
And then there’s Promotion. Don’t “launch it and leave it,” introducing products without marketing support. Even singular, low-investment, tactics can generate sales velocity: DG Stories ad campaigns on the app, cash back offers via Ibotta, at-shelf messaging through Vestcom or Neptune Retail Solutions, or secondary displays (PDQ trays, floorstands).
3. Deliver Value Beyond Price: Intensifying price competition from mass merchants and drugstores is pushing Dollar General to adjust its shopper messaging to cover other aspects of the value equation — like time savings, cost per serving, or annual savings. Brands should follow suit.
4. Grow the Basket: The average transaction size at Dollar General is under $20, so incentivizing shoppers to add one more item to the basket would be a great help to the retailer.
Some ideas: consider leveraging national programs, find opportunities to partner with Clover Valley private-label SKUs, or consider “Spend $X, Save $Y” offers.
5. Drive Incrementality: We mean this literally. Leverage DG Delivery to reach new customers as Dollar General continues rolling out the service. On-demand delivery and the myDG loyalty program have helped to drive digital engagement up 30% year-over-year. And delivery so far has been incremental to store trips — capturing fill‑in, forgotten, or urgent‑need missions and generating larger baskets.
Meanwhile, myDG is fueling repeat trips by providing free delivery, digital coupons, and cash back to members. Brand programs are enjoying higher conversion rates.
6. Be a Great Partner: The enterprise wide “DG1” approach provides proactive visibility to investments across DGMN, Vestcom, Neptune, and national media (via The Trade Desk) to let brands build connected commerce programs.
Elsewhere, consider exclusive/limited-time products, flavors, or varieties that make Dollar General a destination. Partner with DGMN for test & learn campaigns on new tactics. And work with your sales team to ensure that table stakes investments like digital coupons and support of the Dollar General Literacy Foundation are covered.
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Mars United’s Retail Consultancy is an unrivaled team of in-market commerce experts who simplify the complexity of retail for our clients. Located in Bentonville, Minneapolis, Cincinnati, Chicago, Seattle, and the “backyards” of other key retailers, they provide deep knowledge of the retailer, expertise in key business areas (like strategy, media and creative), and door-opening personal relationships with key executives to deliver an unmatched level of business success for clients across accounts, channels, and shopper engagement platforms. For more information, contact EVP-Retail Consultancy Kandi Arrington at [email protected].
