Dollar General Market: Still in the Lab

JON SPRINGER

THE RESHUFFLING OF PRIORITIES at Dollar General that sparked its recent renaissance has left at least one of its former projects in limbo.

Dollar General Market, the company's attempt at a small grocery store, has been holding steady at 57 stores ever since 2007. The concept launched in 2003.

“DG Markets were, and continue to be, laboratory stores where we test new ideas,” Tawn Earnest, a spokeswoman for Dollar General, told SN. “We have not announced any plans for additional DG Markets.”

Dollar General Market stores have about 17,000 square feet of selling space, and offer an expanded array of bargain-priced dry groceries and perishables, including about 20 SKUs of produce and about 50 doors of refrigerated and frozen merchandise. The Market stores also offer appliances, craft and hobby items, magazines and home-entertainment products like CDs and DVDs.

Company officials have said little about the concept publicly. Observers contacted by SN said they assumed the company likely found the concept required expertise and expenses that were out of line with its primary 7,000-square-foot discount stores. Those locations in the meantime have added more food items including some perishables.

“Dollar General Market is one area that would make me nervous,” Dave Marcotte, director of retail insights for Kantar Retail, Cambridge, Mass., told SN. “Because once you cross that line into perishables it's a whole other skill set, a whole different gross margin, a whole new approach to shrink. And in addition to more labor, you have expenses for store equipment that are more than their typical box.”