Goodlettsville, TN–Dollar General is coming to a neighborhood near you. The company plans to open 625 new stores and create 6,000 new jobs in fiscal 2011, as cost-conscious shoppers increasingly look for deals on items including basic apparel.
The retailer, which already has more than 9,200 stores, also says it plans to remodel or relocate 550 stores. The additional stores will dramatically expand its presence in its 35-state operating area and open stores for the first time in Connecticut, Nevada and New Hampshire.
In December, the retailer raised its full-year earnings outlook after posting a 68.4% hike in third quarter profit to $128 million. Sales surged 10.1% to $3.22 billion.
Rival Family Dollar Stores Inc. is also opening more stores and expanding its refurbishment program after posting 23% surge in fourth quarter and full-year profit. Family Dollar plans to open about 300 new stores in the year ahead and renovate 600 to 800 of its 6,800 stores as part of moves to drive revenue growth.
The dollar store discount channel continues to build as high unemployment continues, analysts said. Laura Champine, a retail analyst at Cowen & Co., is among those who see dollar stores growing despite a rebound in luxury categories in recent months.
“We didn’t expect to be promoting the stocks of the discounters at this stage of the recovery,” Champine told Time magazine. “This reflects the high unemployment levels and a value-focused consumer. Usually, we’d be recommending the growth-oriented retailers, not the bottom feeders.”