Dollar General (DG) Gets Smaller to Get Bigger

Dollar General (DG) plans to expand its test of its smaller-format stores this year even as other retailers, Wal-Mart Stores (WMT) in particular, have abandoned the concept, Investor’s Business Daily reported.

Dollar General currently is trying out around 30 of the smaller-format stores, which are less than 6,000 square feet vs. 7,400 square feet at the typical location. Earlier this month, the company said it will open about 80 smaller-format stores this year as part of an overall plan to open 900 new stores.

The smaller stores help Dollar General “capture growth opportunities” in more densely populated metropolitan areas and smaller, lower household rural sites,” said Chief Executive Todd Vasos.

Dollar General announced Wednesday it also plans to step up its growth in 2017, adding 1,000 new stores. In addition to its new stores, the company plans to remodel or relocate 1,775 outlets between now and the end of 2017.

DG is a Cabot Benjamin Graham Value Investor stock.

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