The exterior of a Dollar General convenience store in Austin, Texas, on August 30, 2024.
Brandon Bell | Getty Images
Dollar General Is testing same-day delivery to customers’ homes as the deep discounter tries to fend off tougher competition Walmart.
During an earnings call Thursday, Dollar General Chief Executive Todd Vasos said the retailer “soft-launched” its delivery program in September. About 75 stores now offer same-day delivery, he said. It was provided through a third-party company, which he did not name.
“We’ve always said here, ‘When the time comes we’ll deliver it our way,'” Vassos said. “We believe it’s time.”
He said the company expects to eventually expand its offerings to “thousands of stores.”
With same-day delivery, the Tennessee-based dollar store acknowledges pressure from other retailers such as Walmart, Amazon and Temu that offer convenience and low prices. For example, Walmart’s online business has grown significantly, with its U.S. e-commerce business achieving double-digit growth for 10 consecutive quarters thanks to curbside pickup and faster home delivery.
Dollar General, on the other hand, typically doesn’t share updates or specific numbers on its e-commerce business in quarterly earnings reports because the company relies heavily on physical sales.
Over the past year, however, Dollar General has felt the pressure of both economic challenges and its own strategy. Consumers, especially low-income households, have cut back on discretionary purchases due to the cumulative effect of high inflation. Dollar General also paid millions of dollars in fines for careless stores and blocked fire exits, which became both a workplace safety hazard and could lead to lost shoppers.
In recent months, Dollar General’s chief executive has said he would lose market share to Walmart. “Workers in Bentonville (Ark., where Walmart is headquartered) represent a larger share of the retailer’s middle-income customer base,” Vassos said at the Goldman Sachs Retail Conference in September.
Vasos said the company launched its program after learning about DoorDash’s delivery service, which is available at about 16,000 stores.
According to reports, the new product DG Delivery is available to customers in some stores. Dollar General’s website. Customers place an order through Dollar General’s app and get the same prices and delivery service as in stores in just an hour. The program also accepts digital coupons and offers cash back rewards.
DG Delivery appears to have no fees and no minimum order requirements, according to the website.
During Thursday’s Dollar General earnings call, Vassos said Dollar General is still working on a business model for its online offerings, but said it relies on third-party labor rather than using store employees or company-hired delivery personnel. . Same-day delivery is also an opportunity to grow the retailer’s advertising business, he said, as customers use the app more frequently when placing orders.
But only a handful of Dollar General stores still offer this option. It has more than 20,000 stores nationwide, many in rural areas of the United States
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