GOODLETTSVILLE, Tenn. — Dollar General said it would expand its new store rollout in fiscal 2011, opening 625 new stores and executing 550 remodels. In addition, the chain could resume growing its Dollar General Market format, which has shown some promise after some stores were remodeled, company officials said Monday.
The 57-store Dollar General Market concept had been on hold since new owners took over the company in 2008, but Richard Dreiling, chief executive officer, in a conference call Monday said new category management processes and subsequent redesigns at three stores this year produced promising results.
“We have remodeled three of our stores with new packages, new [product] adjacencies and our new category management pods, and each of these are achieving double-digit same-store sales increases,” Dreiling said. “We expect to make further progress on remodeling and remerchandising these stores in 2011 and we currently believe that this concept can play an expanded role in the future of Dollar General.”
The growth plans were announced while the discounter posted financial results for the third quarter, which ended Oct. 29. Earnings of $128 million exceeded analyst estimates, but investors apparently were unhappy with the pace of sales, and sent Dollar General stock down by more than 7% Monday.
Overall quarterly sales increased 10.1% to $3.2 billion, with comparable-store sales of 4.2%. Comps were near the low end of Dollar General’s annual guidance, and were weaker than a 9.2% gain during last year’s third quarter.