Dollar General expanding small store base

Dollar General (NYSE:DG) will add more small format stores in both urban and rural markets.

The retailer currently operates 30 such units of less than 6,000 sq. ft. of selling space, roughly 20 percent smaller than the average store, according to CEO Todd Vasos.

The program has been a test for Dollar General, which will add 80 new units this year.

"We have been conducting a test and learn for our smaller format store that allows us to capture growth opportunities in more densely populated metropolitan areas," Vasos said during a call with investors.

The smaller footprint allows Dollar General entry into denser urban areas, but it is also helping to fuel growth in rural markets with smaller household counts.

Small formats are giving retailers entry into new markets, but not all are succeeding. Target is growing its urban format footprint even as Walmart announced the closure of the Walmart Express small stores intended for urban markets.

In all, Dollar General will open roughly 900 stores this year.

For more:
-See this Dollar General conference call transcript
-See this Supermarket News story

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