Dollar General to build first brand-new dual distribution center

To help drive its fresh food strategy, Dollar General plans to build its first combination dry and DG Fresh distribution center in Blair, Neb.

The 800,000-square-foot DC will support more than 1,500 stores in the Midwest. Construction for the $85 million project, announced this week, is slated to start in December, with the facility’s completion expected in early 2022.

Goodlettsville, Tenn.-based Dollar General said the Blair DC will house about 650,000 square feet of dry goods and approximately 150,000 square feet of DG Fresh items. The chain operates over 130 stores in Nebraska.

“We are excited for the addition of our first-ever, ground-up dual distribution center, which is to be built in Blair, and look forward to expanding our mission of ‘Serving Others’ in the Midwest,” Mike Kindy, executive vice president of global supply chain at Dollar General, said in a statement. “We are grateful for the continued partnerships with Nebraska state and local leaders, particularly Gov. Pete Ricketts and Washington County Economic Development Director Mike Rooks, who, together with their outstanding teams, have helped make this project possible. We also look forward to welcoming approximately 400 new Nebraskan employees to our Dollar General family soon.”

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Currently, Dollar General operates 17 dry distribution centers and eight DG Fresh facilities nationwide. The new distribution investment comes about three months after Dollar General unveiled plans to add a traditional DC in Walton, Ky., and DG Fresh cold storage facilities in Bowling Green, Ky.; Ardmore, Okla., and West Sacramento, Calif.

The 630,000-square-foot Walton facility will be Dollar General’s 18th traditional DC and, at full capacity, will serve 800 stores. Building for the $65 million project began in September, and the facility is expected to go into operation in January 2021. Dollar General operates more than 580 stores in Kentucky.

Construction also is under way for the 160,000-square-foot DG Fresh facility in Ardmore, which Dollar General said will provide dual distribution synergies with the traditional dry DC that opened in there in 1994. The DG Fresh area is expected to be completed by next spring. Also kicking off this fall is construction for a 160,000-square-foot DG Fresh facility in Bowling Green, which is due to be up and running by summer 2021.

Dollar General said the 200,000-square-foot DG Fresh facility in West Sacramento, launching this fall, will complement its West Coast distribution operations, which includes its Lebec DC that opened in 2012. The company said it’s also adding DG Fresh capabilities to a traditional dry DC in Zanesville, Ohio.

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Dollar General announced its plan to shift to self-distribution of perishables, mainly fresh and frozen food, in March 2019. Over 870 stores now carry fresh fruit and vegetables.

Dollar General announced its plan to shift to self-distribution of perishables, mainly fresh and frozen food, in March 2019. The effort is part of the DG Fresh initiative launched in January 2019 to bring more frozen and fresh foods, including produce, to its stores. That began with the distribution of perishable items to about 300 stores in the Northeast from a cold storage facility the company owns in Pottsville, Pa.

In reporting fiscal 2020 second-quarter results in late August, CEO Todd Vasos reported that Dollar General has accelerated the DG Fresh rollout.

“We were self-distributing to more than 12,000 stores from eight DG Fresh facilities at the end of Q2,” Vasos told analysts in a conference call. “Given our success and strong execution to date, we now expect to capture benefits from DG Fresh in approximately 14,000 stores from at least 10 facilities by the end of this year. This compares to our previous expectation of approximately 12,000 stores by year's end.”

During the fiscal 2020 first half, Dollar General opened 500 new stores and remodeled 973 stores, including the addition of more than 30,000 cooler doors. Fresh produce was added at more than 120 stores, with a total of over 870 stores carrying fresh fruit and vegetables. The retailer ended the period with a total of 16,720 stores in 46 states. For the full year, Dollar General plans to open 1,000 new stores and remodel 1,670 stores, with a total addition of 60,000 cooler doors, up from its earlier target of 55,000 cooler doors for 2020.