DOLLAR GENERAL RETOOLS MANAGEMENT

MARK HAMSTRA

GOODLETTSVILLE, Tenn. -- Dollar General here said it planned to open 30 of its Dollar General Market stores in 2006 after revamping the way it manages the banner.

Wayne Gibson, previously an executive with Home Depot and Rite Aid and a former retail consultant with Deloitte & Touche, last month was named senior vice president with responsibility for expanding the Dollar General Market, which now includes 40 food-and-general-merchandise combo stores. He will oversee a dedicated staff, a change from the previous organizational structure in which the company drew on the expertise of people from various other areas of the company to launch the concept.

"He's got a great track record, and he is certainly the entrepreneurial type that we want to head this up," said David Purdue, chairman and chief executive officer, Dollar General, in a conference call discussing third-quarter earnings. "I think Wayne's going to be the perfect guy to lead us through the next few years as we get this thing going."

Purdue said the company is continuing to gauge consumer reaction to the Dollar General Market banner, and is testing merchandising strategies.

"We're also continuing to be very aggressive in terms of our pricing and how we compete in local markets," he said.

Selecting the right site for the DG Market concept is critical, he pointed out.

"We had several learnings in 2005 about where they work and where they don't work," he said. "We have many of our [DG Market] stores that are doing everything we want. We have a few that were a little disappointing. But I think with that, they were primarily real estate-related. I think we are going to try to step out in 2006 with a little broader geographic penetration."

Some of the 30 Market stores the company has planned will be conversions of existing nonfood sites.