Dollar General Doubles Down On Suburban ‘Popshelf’ Ambitions With 1000 Stores

Dollar General’s DG new suburban store, Popshelf, that offers items for $5 or less has been wildly successful so far leading to massive expansion. The discount retailer plans to have approximately 1,000 of the stores by the end of its 2025 fiscal year. As the company wades deeper into the suburbs where 39% of African Americans live, just how valuable will the Black dollar become for the company’s bottom line with their $1.4 trillion in spending power?

The Breakdown You Need to Know: The new 1,000 stores are set to be rolled out in high-end areas where the annual household income is as high as $125,000, the company said. CultureBanx noted that leaning into its new Popshelf concept comes amid a broader push by the other discount chains to raise their prices, largely due to inflation pressures hovering at 30-year highs and rising labor costs.

Dollar General bucked the trend when it launched an entirely new format by opening 8 Popshelf stores between October 2020 and May 2021, with impressive metrics across the board. Gross margin is 40%, eight points higher than a traditional Dollar General.  Popshelf test stores had annualized sales ranging from $1.7 million to $2 million per store, compared with $1.4 million for first-year sales at a standard Dollar General. 

Popping Into The ‘Burbs: The company’s targeted customers are primarily women who are located in diverse suburban communities, with a total household annual income ranging from $50,000 to $125,000. Typically, the low-cost chain has largely catered to customers on a tight budget to shop at the company’s more than 16,000 stores. Right now their average shopper comes from a household that earns $40,000 or less per year. In 2019, the U.S. Census Bureau released data showing the median income for an African American household was $39,490, putting them right in the Dollar General consumer sweet spot. 

Moving to the suburbs has become increasingly more diverse, with 39% of African Americans calling the area home in 2014, according to the Brookings Institute. That’s a noticeable shift from 2000, when only 33% of African Americans lived in the suburbs, and exactly why they should be on Dollar General’s radar. Minorities represent 35% of suburban residents, similar to their share of overall U.S. population. Not to mention the $1.4 trillion dollars in spending power that African Americans possessed in 2019, which is expected to grow to $1.8 trillion by 2024, according to the Selig Center for Economic Growth.

What’s Next: There are currently about 36 Popshelf stores out of more than 18,000 Dollar General locations across 46 states. The company is also taking its talent internationally and plans to open its first stores outside the U.S. next year with 10 stores in Mexico.‍