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They consider it a homemade competitive weapon against Dollar Tree, Freds, 99 Cents Only and especially Family Dollar, which, at $5 billion in sales and 5,200 stores, is the next-biggest chain. So critical is speed-to-market for Dollar General that company officials decline to talk about the store-opening process. “Im not sure Dollar General knows that yet.

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at stores, how to use it there to further your goals,” says Greg Buzek, an analyst at IHL Consulting Group, a retail technology consultancy in Franklin, Tenn.

There is no store-level inventory system.

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Items are bar coded, but store employees dont have readers or software to verify shipments and check in products as they hoist hundreds of cartons off delivery trucks every week. About 3 percent of sales disappeared last year due to theft and loss. That may keep store operating costs low, but there are consequences. The company spends less on technology per employee every year-about $3,000-than any of its dollar-store competitors, according to Alinean, a technology measurement firm in Orlando, Fla. A Hewlett-Packard Superdome mainframe computer in Goodlettsville polls each stores IBM cash registers via satellite network every night, recording how many of which items were sold and at what price. Aside from word of mouth, the only way information on each days sales gets back to headquarters is when headquarters asks for it. No local servers keeping track of inventory. Yes, its seven distribution centers sport radio-frequency scanners and a raft of warehouse management and logistics software.Ĭheck out s Enterprise Applications Center at for the latest news, reviews and analysis about productivity and business solutions.īut the stores are spare. Sure, the headquarters office in Goodlettsville, Tenn., offers on-site day care and dry cleaning. “The technology strategy reflects that to a T.” Store-level frugality “is where their profit margin comes from,” says Ben Ball, an analyst at Dechert-Hampe & Co., a consumer products consulting firm in Northbrook, Ill. But Dollar General made 4.3 cents on each dollar of sales, making it 12 percent more profitable than the worlds biggest retailer. Wal-Mart last year earned 3.5 cents on each dollar of its $256.3 billion in sales. Where the company 10 years ago took weeks to launch a new store, it now has the process down to eight days, or fewer.Īnd each additional day of operation is another day added to Dollar Generals surprising success at out-retailing Wal-Mart itself. Each day it can slice off the opening process means $2,800 in added revenue and $124 in profit at a typical store. Successfully opening two stores a day is more than a matter of precision logistics: Its crucial to Dollar Generals bottom-line results. The company is adding 695 stores this year, on top of 1,300 launched in the last two years. Check again a week from now, and 14 more will have been born. Shoppers spent $16.6 billion last year at the top five dollar stores, up from $12.2 billion in 2002.ĭollar General is the king of that market, generating $6.9 billion a year in sales in 29 states from 6,930 stores. But the combination of $1 shampoo, $3 bug killer and $7 area rugs is big business. Not everything at a dollar store costs just a buck. Now that Wal-Mart pushes wide-screen TVs and vacation packages along with its low-priced detergent, theres room underneath for chains devoted only to small-ticket goods. Its what Sam Walton envisioned when he created Wal-Mart in 1962: a neighborhood store selling affordable necessities to people who cant pay top prices for soap and toilet tissue. Todays dollar store is a five-and-dime shop, adjusted for inflation.

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