Dollar General accelerates produce initiatives, aims for fresh produce in more than 1,000 stores in 2020

Goodlettsville, TN-based Dollar General BB #:172794 had another strong quarter, posting the best same-store sales increase the company has had in seven years, up 3.2% in the quarter.

Successes with adding more fresh produce and perishables are pushing the company to accelerate plans to add more fresh produce and expand the DG Fresh self-distribution initiative.

Dollar General originally planned to add fresh produce to 250 stores this year. That number is up to 400, for a total of 1,000 stores by the end of 2020, said Jeff Owen chief operating officer, during the company’s fourth quarter earnings call held March 12.

“We are also accelerating the expansion of our fresh produce offering, which provides the Top 20 items typically sold in traditional grocery stores and covers approximately 80% of the overall categories they carry,” Owen said, during the call.

The company’s roll-out of DG Fresh self-distribution of perishables is a strong driver for gross margin, said CEO Todd Vasos, during the call. The company currently has five DG Fresh facilities delivering to 6,000 stores.

“Our goal for 2020 is to capture benefits from DG Fresh in approximately 12,000 stores, or about double the current store count, from up to 10 facilities by year’s end, he said.

Success in DG Fresh’s current lineup of refrigerated and frozen will determine if and when the company adds produce to its self-distribution.

“While Produce is not included in our initial rollout plans, we believe DG Fresh could eventually provide a potential path toward expanding our produce offering to more stores in the future,” he said.