达乐近几年的增长，与另一个因素也有重要的关系——近些年来，美国人的消费理念出现了深刻的甚至貌似是永久性的变化。现在就连中产阶级家庭也更多地去T.J. Maxx这种折扣店而不是去商场买衣服，他们在购买日用品时，也开始比以前更青睐深度打折的一元店。特尔西咨询集团（Telsey Advisory Group）的分析师乔·费尔德曼认为：“一元店已经越来越被所有各个群体接受。”在经历过经济危机时期的穷日子后，大家都明白了活面子不如活里子这个真理。现在经济复苏了，但大家也习惯了“消费降级”的生活，去一元店购物并不会有什么羞耻感。
The boxy, brick-fronted shop in the town square of Scottsville, Ky. (population: 4,500), is one of the oldest stores in the Dollar General chain—and it looks its age. The aisles are cluttered; the ceilings are low; the lights are dim. There are rows of plastic storage containers, towers of paper towels, and fridges full of frozen pizzas—the kind of seemingly random, dirt-cheap bric-a-brac that fits the drab dollar-store stereotype.
But not far past the entrance, shoppers can spot something incongruous: a sleek cooler full of Starbucks drinks, topped by the coffee chain’s smiley mermaid logo. There, a shopper can grab a Doubleshot espresso for $2 or get two cans of frappuccino for $5. They’re the sort of modest extravagances associated more with bougie city thoroughfares than with rural town squares—and, with the nearest actual Starbucks a 30-minute drive away, in Bowling Green, they’re a magnet for caffeine cravers. And frappuccinos aren’t the only semi-upscale impulse purchase on the shelves. This Dollar General also offers Keurig K-Cups and Dannon yogurts; not long before Christmas, it started selling Lego kits priced from $8 to $20.
“Just because I don’t have a lot of money, that doesn’t mean I don’t feel like having some of the finer things,” says Todd Vasos, CEO of Dollar General, paraphrasing his prototypical shopper. “We can offer her both value and an indulgence she may want.”
Vasos is on target about his customers’ income. Some 57% of Dollar General’s clientele live in households with income of less than $49,900, according to research firm Kantar, and 30% get by on less than $25,000. (The average U.S. household income is just under $61,000.) Of the 25 stores visited in reporting this article, each had a sizable poster in its window saying the location accepts food stamps.
But by serving the bottom of the nation’s economic pyramid, Dollar General has generated one of the top performance records in retail. In 2018, the company reported its 29th straight year of same-store sales growth—despite minimal e-¬commerce. That’s a streak no other major U.S. retailer can match: Even mighty Walmart endured nearly two years of comparable-¬sales declines earlier this decade.
What’s more, tapping the aspirational strain that Vasos (rhymes with “Bezos”) describes has helped the company sidestep the recent retail meltdown that has vaporized many other national chains’ stores in recent years. Dollar General racked up $25.6 billion in revenue in 2018 and eclipsed Macy’s in retail sales for the first time. Its stock is near an all-time high, giving it a market cap of $33 billion, five times higher than Macy’s.
The chain opened its first retail store in 1955 in Springfield, Ky., and for most of the ensuing six-plus decades, it has thrived with a simple playbook: Open small, no-frills stores in towns that bigger retailers shun; offer a narrow product range; and limit staffing, the better to keep prices cheap, cheap, cheap. “Dollar General was like a child whose parents were 7-Eleven and Walmart,” says David Perdue, the company’s CEO from 2003 to 2007 and now a U.S. senator from Georgia. “It offered 7-Eleven convenience at Walmart prices.”
That metaphorical union has created a fast-growing family. Dollar General is now the largest U.S. retail chain by store count, with 15,472 stores, up from 8,400 a decade ago. Remarkably, some 75% of Americans now live within five miles of a Dollar General.
But another factor has been just as important to the recent surge: a profound, seemingly permanent change in how American consumers shop. Just as middle-class shoppers now buy more apparel at bargain retailer T.J. Maxx than at department stores, they also frequent deep-discount dollar stores more often. “The dollar stores have become a lot more acceptable to all income demographics,” says Telsey Advisory Group analyst Joe Feldman. The privations of the Great Recession scrubbed these unglamorous bargain basements of their stigma; the economy came back, but the stigma didn’t.
The industry has plenty of room to grow. According to Nielsen data, dollar stores were the only category of retail whose total number of U.S. locations increased last year. But by some estimates, they account for only 4% of total retail sales. Dollar General hopes to keep capitalizing. On an earnings call last year, Vasos told analysts that he thought the country had room for another 12,000 or 13,000 dollar-store locations; this year alone, Dollar General will open 975. As Vasos notes, “Saving now is more chic than ever.”
Over the past decade, Dollar General has played the expansion game to perfection. Those Starbucks treats in Scottsville aren’t just splurges for lower-income shoppers; they’re signals to help middle-income ones feel at home. Today the company sees that middle-class market as a crucial source of new growth, and it’s willing to stretch outside its comfort zone to capture them.
The challenge is to make sure stretching doesn’t blow up a perfectly good business model. Having built its empire with the help of frozen pizzas and potato chips, Dollar General is making a bigger push into fresh produce, meats, and healthier fare—arenas where costs are higher and margins slimmer. It also aims to widen its footprint in larger cities and on the West Coast, where other dollar stores are better established and where it has less brand recognition.
To counter these risks, Dollar General plans to change slowly and deliberately, tweaking only a small percentage of its stores at once. But not changing is not an option, says Vasos: “Retail is moving faster than ever, and you have to be flexible to ensure you’re moving where the customer wants you to move.” If Vasos needs a reminder of that, he can check out the view from his headquarters in a Nashville suburb—a vista that includes a mall anchored by a vacant Sears.
1968年，达乐公司挂牌上市，在接下来的几十年，更是呈爆炸式增长——方法仍然是开更多的一元店，这些商店与老特纳时代的夫妻店并没有什么本质区别。达乐公司始终没有偏离最初令它成功的路线。小卡尔·特纳（卡尔·特纳的儿子，曾经在1977年至2002年间任公司的CEO）在2018年出版的自传中写道：“大多数零售商到了某个阶段，都会抵御不住升级的诱惑。”但达乐公司却不是这样。零售业咨询机构Customer Growth Partners公司的总裁克雷格·约翰逊这样评价达乐：“他们对低收入消费者的需求了如指掌。”
达乐的经营方法虽然带来了显著增长，但随着时间的推移，效率不足的问题也暴露了出来。到2007年，它的销售额增长率已经落后于它的两个主要竞争对手Family Dollar和Dollar Tree。松散的库存管理意味着受欢迎的商品经常缺货，与此同时，它的很多商店都很破旧。
At one point in the 1950s, a surprisingly large contingent of the men in Springfield, Ky., were wearing bright pink corduroy pants. For that sartorial adventurism, they could thank Cal Turner. A family friend had been swimming in an oversupply of the fabric. Turner persuaded the friend to turn it into men’s pants, which he bought for a pittance and sold in enormous quantities at his own store—at the low price of $1 a pair.
Cal and his father, J.L. Turner, had started the business that became Dollar General in Scottsville, Ky., in 1939. The company was originally a wholesaler serving department stores, but when business faltered, the Turners went down-market to serve lower-income rural shoppers. Under J.L.’s leadership, the company gradually expanded into more stores, riding the success of the one-dollar-an-item gimmick while selling a broad enough assortment to justify its original name: Dollar General Stores.
The company went public in 1968, and it grew explosively in the next decades—often at the expense of the kinds of mom-and-pop stores that the Turners had once operated. It never strayed from what made it successful. “Most retailers at one point or another fall prey to the temptation to upgrade,” Cal Turner Jr., Cal’s son and the company’s CEO from 1977 to 2002, wrote in his 2018 autobiography. Not Dollar General: “They know the wants and needs of the lower-income shopper like the back of their hands,” says Craig Johnson, president of retail consulting firm Customer Growth Partners.
Over time, the company translated that knowledge into a reliable formula. It has typically focused on towns of no more than 20,000 people—markets too minor for Walmart and big grocers to bother with. Its stores average around 7,500 square feet, tiny compared to a Walmart super¬center. It sells no more than 10,000 items (a big Walmart might sell 10 times as many). At that scale, a Dollar General store needs only two or three employees on any shift. And with real estate and labor costs low, Dollar General can keep the vast majority of its items under $10 and still turn a tidy profit.
The formula means a Dollar General shopper might find only one or two brands of peanut butter or three sizes of Tide laundry detergent, rather than the endless assortment at big-box rivals. The chain also emphasizes smaller formats of products like bleach and dish soap. A more affluent shopper might think of these as “travel size”; for dollar-store customers, it’s often a matter of buying only as much as they can afford at that moment.
Dollar General’s approach sparked remarkable growth, but over time, efficiency suffered. By 2007, its sales growth was lagging its two rivals, Family Dollar and Dollar Tree. Lax inventory management meant favored items were often out of stock, and many stores were shabby.
Private equity juggernaut KKR saw Dollar General as a company that could rally with a management shake-up, and it bought the company for $7 billion in 2007. It took Dollar General public again just two years later—in what turned into one of its most successful deals ever. By the time KKR sold off the last of its shares, around the end of 2013, Dollar General’s shares had nearly tripled from their 2009 IPO price. By this May, they’d risen almost sixfold.
Key to the turnaround was KKR’s decision to bring in a crack team of executives with experience in the drugstore and supermarket world (including Vasos, an Eckerd and Longs Drugs veteran). That team, in turn, made strategic choices that helped Dollar General woo customers away from such retailers. The company continually remodeled stores, improving lighting and making shopping areas more spacious; new stores were better organized and sleeker.
Dollar General also vastly improved its inventory management. It removed redundant products, as managers realized they sold too many versions of the same items. It ramped up its private label brands, which sold at higher margins and gave the store freedom to offer nonstandard, smaller sizes. Today the company knows its shoppers at a surprisingly granular level. Dollar General does panel interviews each quarter with hundreds of thousands of shoppers, along with an annual “go deep” survey, all designed to make sure that its 10,000-product lineup matches what its customers want.
That lineup isn’t limited to no-name brands. Its enormous growth and reach have given Dollar General even more clout with national brands like Coca-Cola and Hershey. They’re more likely to give the chain the sizes and packaging it wants, along with better-looking point-of-sale displays once reserved for fancier retailers. “There was a time the big consumer packaged-goods companies just hoped it would go away,” says Joel Rampoldt, a managing director in AlixPartners’ retail practice. “Now they need the dollar-store channel.”
As savvy as its management has been, Dollar General might never have reached its current heights without the dramatic disruption of the Great Recession. In 2009 and 2010, the company was broadening its assortment and improving its stores even as the ranks of cash-strapped shoppers surged. Middle-class consumers defected to Dollar General and its rivals from Walmart, Target, drugstores, and supermarkets.
As the economy improved and unemployment fell, many analysts assumed the dollar stores would give up some of their gains. But wages didn’t recover, and the working and middle classes remained cost-conscious. Kurt Jetta, executive chairman of -consumer-goods research firm TABS Analytics, says income inequality is a key reason the dollar-store juggernaut has continued to roll.
In the enduring battle for shoppers, Dollar General also got an assist from some rivals. CVS, for example, stopped selling tobacco in 2014, driving smokers to dollar stores. (See our feature on CVS in this issue.) Walmart, meanwhile, tweaked its clothing and beauty-product assortment to make them more upscale, ceding some of the lower end to the $1 crowd.
几十年来，这一点基本上是正确的。Dollar Tree开了15300家商店，也仍然遵循着这一准则。不过达乐和Family Dollar等一元店中的多数商品的价格是在1到10美元不等。
Five Myths About Dollar Stores
The nation now has nearly 32,000 dollar stores, and they’re increasingly unlikely to match their popular stereotypes.
Myth No. 1: Everything Costs $1
That was largely true for decades, and it still is at the 15,300-store Dollar Tree chain. But the bulk of items for sale at Family Dollar and Dollar General cost between $1 and $10.
Myth No. 2: Only poor people shop there
Dollar stores made inroads into the middle class during the Great Recession. In a 2018 Inmar survey of dollar-store patrons, 21% reported annual household income of $100,000 or more.
Myth No. 3: They sell only junk food
Yes, frozen ¬pizzas and packaged snacks abound at dollar stores. But major chains are now adding healthier fare, including fresh produce at some locations.
Myth No. 4: Their merchandise is closeout junk
Dollar stores once sold a mishmash of clearance and overstock items. But such is their clout now that consumer giants like P&G and Coca-Cola make products just for them.
Myth No. 5: They’re only in remote areas
While the chains do skew toward rural America and smaller towns, Dollar Tree has a strong presence in cities and suburbs, and Dollar General is expanding there.
常言说得好：塞翁失马，焉知非福。2015年，达乐的主要竞争对手Dollar Tree在竞标中击败达乐，成功收购了另一家业绩较弱的一元店品牌Family Dollar。然而这次收购严重阻碍了Dollar Tree的发展，二者合并后的新公司拥有15300家门店，与达乐不相上下，不过由于对Family Dollar的数百家门店进行了大修，合并后Dollar Tree的增长已经放缓，最近该公司还因为这笔交易而减记了27亿美元。
Perhaps the biggest windfall came disguised as a setback, when archrival Dollar Tree beat Dollar General in a bidding war for the weaker-performing Family Dollar. That 2015 acquisition has seriously hampered Dollar Tree. The combined company has 15,300 stores, almost as many as Dollar General, but its growth has slowed as it overhauls hundreds of Family Dollar locations. Dollar Tree recently took a $2.7 billion write-down related to the merger.
All these factors put Dollar General in the pole position in the race to serve households earning between $50,000 and $75,000 a year. Those are the fastest-growing part of its clientele, J.P. Morgan recently estimated. Dollar General refers to its most frequent shoppers, those with the lowest annual incomes, as “BFFs,” or best friends forever, while mid-tier shoppers are “friends.” The next tier up, the one J.P. Morgan identified as the fastest growers, are “acquain¬tances,” and Dollar General would like to know them much better.
达乐永远不会成为全食公司。在田纳西州亨德森维尔的一家达乐商店里，最贵的红酒是Barefoot Moscato，一瓶只卖13.1美元。不过它新推出的食品却包括了很多富裕阶层的消费者也喜欢的东西。达乐正在更多商店推出“更适合你”的产品，如它自家经营的“Good & Smart”商标下的产品，以及Annie’s、Nature Valley和Kashi等知名品牌的产品。达乐也开始卖水果了，而且它的展示方式也令这些水果显得很诱人——这些水果装在貌似由木头做成的箱子里，只有凑近了看，才能发现它们是塑料做的。
As a business proposition, selling ground beef and tomatoes is inherently riskier than selling corn chips and frozen burritos. Produce and fresh meat spoil; employees need to keep a close eye on them and toss them if they go bad. “You’re talking about a level of supervision that is much higher,” says Craig Johnson, the retail consultant. That can mean higher labor costs that eat into the notoriously thin fresh-food margins.
Despite that hassle, fresh food could be the key to Dollar General’s next growth phase—especially if it makes both “BFFs” and “acquaintances” visit more often. “The key is to have [customers] pick up an extra item that they would not have in the past,” says Moody’s analyst Mickey Chadha. Shoppers spend $13 on the average dollar-store visit, according to Nielsen, compared with $40 at a big-box store like Walmart. Dollar General doesn’t have the product selection to replace supermarkets for regular food runs, but capturing just one more purchase per visit has a big impact on revenue.
The company already has evidence that food pays. It says that at traditional Dollar General stores that add a bunch of refrigerators—a sign that they’re expanding their food options—sales typically increase 10% to 15% in the first year. Dollar General sells produce at 450 of its stores, including a few dozen in a mini-supermarket format that it launched in 2003. It’ll add such items at an additional 200 stores this year, a tiny fraction of its fleet but a big enough laboratory to test whether food spurs greater loyalty.
Behind the scenes, the company is taking steps to make sure its food inventory is as tightly managed as the rest of its lineup. Among other major initiatives, it is testing a cold-storage facility in Pennsylvania that’s just for perishable food in its own stores. The idea is to take costs out of the system, avoid being out of stock of popular products, and have “control over our destiny,” says chief merchant Jason Reiser. Dollar General could potentially double its profit margin on milk, for example, by getting it to coolers earlier, reducing spoilage.
Dollar General will never be Whole Foods. At a store in Hendersonville, Tenn., the most expensive wine is a Barefoot Moscato, at $13.10 a bottle. But its new food offerings include many of the aspirational trappings that more affluent shoppers prefer. The chain is introducing “better for you” products at more stores, including foods marketed under its own “Good & Smart” label, alongside name brands like Annie’s, Nature Valley, and Kashi. The stores that sell fruits, meanwhile, present them in surprisingly inviting displays, in crates that look like they’re made of wood—and reveal themselves as plastic only when you get close enough to touch them.
最近，罗利、纳什维尔或者费城的消费者在逛街时，可能会无意中路过一个持着“DGX”标志的现代化的小店面。这些商店是达乐公司的另一个实验品。它们开在城市的中心，主打功能饮料和外卖三明治等产品，旨在吸引更年轻的消费者。今年还将有10家DGX商店将陆续开业，它们将成为达乐与Dollar Tree竞争的新战线——毕竟Dollar Tree在达乐垂涎的城市地区已经深耕多年。
Shoppers wandering through downtown Raleigh, Nashville, or Philadelphia recently may have stumbled upon a small, ¬modern-looking storefront under a “DGX” sign. These stores are another Dollar General experiment: They’re placed in city centers, and they emphasize products like energy drinks and grab-and-go sandwiches in a strategy aimed at younger shoppers. Ten more DGX stores will open this year; they’ll be a new front in Dollar General’s competition with Dollar Tree, which is better established in the urban areas Dollar General covets.
But even at these stores, Dollar General is not fundamentally changing its recipe for success. There may be sushi, sparkling California wine, and Lego sets, but much of the selection at DGX is still priced at $1 or less. These are basic, almost essential items: four rolls of toilet paper for $1, for example, or a $1 chicken pot pie that, for all its potential nutritional drawbacks, still adds up to a meal. They’re also reminders that Dollar General’s core business still depends on the patronage of shoppers without much room for luxury. “One dollar isn’t an impulse price point; it is a ‘get-through-the-month’ price point,” says Reiser, the chief merchant.
Even Dollar General’s tech reflects this reality. A growing number of stores have price-checking scanners sprinkled through the aisles. The idea is to help shoppers keep track of their totals, lest they get to the cash register and realize they don’t have enough money. “They don’t always have that extra dollar in their budget,” says one executive; the last thing the company wants to do is embarrass them at checkout.
A version of this article appears in the June 2019 issue of Fortune with the headline “‘If Walmart and 7-Eleven Had a Baby…'”