Dollar General PL Sales Outpace Overall Revenue Growth

SHARE:

Email

Print

LinkedIn

Facebook

Twitter

September 6, 2011

Dollar General is enjoying higher sales and earnings due, in large part, to increased private label and consumables revenues.

While the economy may still be sluggish, it is translating to greater consumer reliance on store brands across categories at Dollar General.

“Sales of private brands have increased over 15 percent year-to-date, outpacing our overall sales growth,” said Rick Dreiling, chairman and CEO. “We are very pleased with the performance of our expanded health and beauty offering, which includes strong growth in the Rexall brand.”

Dollar General now carries more than 1,400 private label SKUs including nearly 300 with the Rexall name. “Private brands continue to be a significant opportunity for us,” said Dreiling. “We believe we still have significant opportunity to grow.”

Store brands are actually growing faster than the total store sales at the moment, Dreiling told analysts during a question and answer session following a conference call. “We’re really seeing the private brand conversion in health and beauty, and it really speaks well for the future of the Rexall brand.” Shoppers are showing a preference for the store brand over its national brand counterparts. “We might be able to get maybe 50 percent more SKUs in there when it’s all said and done, but we are taking our time with that. And we are letting the customer make that choice,” he said.

Shoppers are more often choosing Dollar General as they continue to struggle in this economy. “Sales exceeded our expectations as we expanded our overall share of the consumables market,” said Dreiling. Dollar General is increasing market share in both units and dollars quarter over quarter and for the past 52 weeks, according to Nielsen data.

“Our comp store sales accelerated from the first quarter and we continued to successfully expand our store base,” Dreiling said. However, the macroeconomic environment has remained difficult for consumers who continue to face high unemployment rates, high gasoline, and high food cost.”

Total sales grew 11.2 percent for the quarter compared to last year and same-store sales jumped 5.9 percent; operating profit was $350 million, up 16 percent from the prior year.

“Sales growth was primarily driven by consumables with our strongest results in food, snacks, and perishables. Pet supplies and health and beauty care performed very well also,” Dreiling said. “Overall, sales in our consumable categories were very strong and a direct result of our ongoing category management efforts, which include a significant focus on increasing our offerings of private brands. Our private brands continue perform well as they help us answer our customer’s demands for low prices on quality products while also boosting our gross margin rate.

During the first half of the year, Dollar General sales were $7 billion, an 11 percent increase, while same-store sales have increased 5.6 percent and net income increased 20 percent to $348 million.

SBD Views: Dollar General’s use of Rexall is a smart strategic move to leverage the equity in this well established brand. -- John Failla for Store Brands Decisions

Read These Related Articles:

• Family Dollar to Ramp Up Store Brands
• Dollar General Renews Focus on Store Brands
• Supervalu and Family Dollar Bring in New Executive Talent
• Food Lion Introduces New Store Brand Cereal
• Dollar General Sales Get a Boost from Store Brands

Most Read

Guest Columns

Grocery Aisle Innovation Key to Retailer and Consumer Cost Savings

Retailers are redesigning the aisle, appealing to environmentally friendly consumers and capitalizing on market trends to make their private label brands more competitive.

Source: Tetra Pak Inc.

How to Develop a Private Label Expression Aligned with Retail Brand Strategy

By creating private label as a marketing tool rather than just a price alternative, retailers gain the opportunity to tell a complete brand story while simultaneously boosting customer loyalty.

Source: CBX

Using the Store Banner to Endorse Private Label Architecture

Although the economic downturn accelerated private label growth in Europe, there was another key driver -- retailers started to brand their stores.

Source: IPLC

See All Guest Columns »

Press Releases