Dollar General CEO cites importance of private brands in retailer’s stellar second-quarter results

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Dollar General CEO cites importance of private brands in retailer’s stellar second-quarter results

08/30/2019

During a conference call with investors to discuss Dollar General’s second-quarter results, Dollar General CEO Todd Vasos noted that the retailer’s private brands continue to be an important area of focus.

“Our goal is to drive overall category awareness and adoption with our customers through improved and more impactful displays, and consistent messaging in-store as well as across print and digital media,” Vasos said Thursday. “I'm pleased with our continued progress across these fronts, which contributed to our strong second-quarter performance.”

Dollar General reported a net sales increase of 8.4% for the second quarter, totaling $7 billion, when compared to its 2018 second quarter. The retailer’s same-store sales increased 4%. Its operating profit increased 5.9% to $577.8 million.

Vasos singled out Dollar General’s Good & Smart private brand, which is part of its “Better For You” initiative, which launched in 2018, to include healthier snacks and fresh products. Good & Smart features food and beverage products that are low in sodium, calorie, fat and sugar levels and made without artificial sweeteners.

“Our Good & Smart brand is especially popular with our customers and remains an important part of our offering,” Vasos said. “This product line provides customers with a variety of better-for-you options at low prices, and is now available in approximately 3,900 stores with plans for further expansion as we move forward.”

Vasos also said he is impressed with the progress of the retailer’s DG Fresh program, which began earlier this year.

“DG Fresh is a strategic multiphase shift to self-distribution of frozen and refrigerated goods such as dairy deli and frozen products,” Vasos said of the program, which includes branded and private-branded products. “This assortment currently represents approximately 8% of our total sales. The primary objective of DG Fresh is to reduce product costs on our frozen and refrigerated items, thereby enhancing gross margin.”

Vasos said DG Fresh will eventually allow Dollar General to control its own destiny on assortment in the categories it represents.

“This could include a wider selection of both national and private brands as well as an enhanced offering for our better-for-you items,” he added. “And while produce is not included in our initial rollout plans, we believe DG Fresh could provide a potential path forward to expanding our produce offerings to more stores in the future.”

Vasos expects DG Fresh to be in 5,000 of Dollar General’s more than 15,500 stores by year’s end.

 

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