Dollar General CEO Sets New Path for Growth 2008-04-07

JON SPRINGER

GOODLETTSVILLE, Tenn. — Rick Dreiling, the former Safeway executive now in charge of Dollar General Corp., promised changes at the neighborhood discounter.

In a conference call reviewing results of a fiscal year in which Dollar General posted a $12.7 million loss and was sold to the buyout firm Kohlberg Kravis Roberts, Dreiling said Dollar General would slow its new-store growth and turn attention to its existing base with an eye toward developing more sophisticated pricing and merchandising and an enhanced brand image, ensuring consistent performance from store to store.

He said the new strategic plan would “build on recent successes while introducing greater operating discipline and a more strategic approach to growth.”

Dreiling, a longtime Safeway veteran who in the last few years launched turnarounds at Longs Drug Stores in California and the Duane Reade drug store chain in New York, was named chief executive officer at Dollar General following the chain's $6.9 billion buyout by KKR.

He described Dollar General as being guilty of “aggressive store expansion without operating discipline” as it ballooned from 5,000 stores in 25 states to 8,200 stores in 35 states between 2000 and 2006.

“Merchandising strategy was not supported by sufficient research and analysis” over the same period, he explained.

Dreiling said Dollar General would look to drive more productive sales, increase gross margins, reduce costs through process and technology improvements, and strengthen company culture and brand image. These four operating priorities would drive profits and growth over the long term, he said.