Dollar General is slowing down the pace of its store openings as consumer demand slows.
The discount retailer announced in its first quarter earnings call on Thursday that it plans to open 990 new stores in 2023, a downgrade from its previously mentioned goal of 1,050 new stores this year. The rollback is concentrated in Dollar General’s Popshelf concept, which is expected to see 90 new stores this year compared to a previously anticipated 150. As a result of the shift, Dollar General said it does not expect to hit its previously outlined goal of having 1,000 Popshelf stores by the end of 2025.
More from Footwear News
The slowdown comes as Dollar General notes a slowdown in demand due to pressure on consumers’ wallets.
“We believe this is a prudent reduction based on the current environment,” said Dollar General CEO Jeffery Carl Owen in a call with analysts. “And as other retailers navigate what this environment means for their businesses, we believe there may be more favorable real estate opportunities to come.”
Dollar General opened 1,039 new stores in 2022.
As a retailer situated in the discount space, Dollar General has largely weathered sales hits due to inflation and the pandemic. Store openings in 2023 have been mainly led by dollar store and discount chains, which have benefitted from cost-cutting consumers. In addition to Dollar General, Dollar Tree and its Family Dollar chain also plan to open new stores in 2023 as well.
In general, store opening announcements in 2023 have thus far outpaced closures this year. Retailers announced about 2,600 store closures and 5,100 store openings for the year, according to Coresight Research cited in BDO’s bi-annual bankruptcy report.
Still, dollar chains are not entirely safe from macro-economic headwinds plaguing the retail industry this quarter. Dollar General shares dropped this morning after it missed earnings and revenue estimates for the first quarter. Dollar Tree also reported a disappointing Q1, missing earnings estimates but beating revenue.
Best of Footwear News