Dollar General increases investment in frontline bonuses by 40%

Dive Brief:

Dollar General plans to award an additional $50 million in bonuses to frontline workers in the fourth quarter, the company announced Tuesday.
That brings the discounter’s investment in bonuses for the second half of the year to $100 million — double the amount it initially planned during the period. All told, Dollar General plans to award $173 million in additional pay to store, distribution center and private fleet employees during fiscal 2020.
The bonuses come amid similar announcements from competing retailers as the holidays draw closer and the pandemic extends into its ninth month.

Dive Insight:

Dollar General is increasing its investment in frontline employee bonuses as sales have performed well above average this year and as other retailers offer extra compensation in order to retain employees and show their appreciation during the pandemic.

In August, the discount retailer said it had given out approximately $73 million in bonuses to workers across its more than 16,000 stores and distribution facilities, and said it planned to award $50 million in additional compensation during the second half of the year. Tuesday’s announcement doubles that back-half commitment and increases its overall bonus allotment for the fiscal year by just over 40%.

Walmart has doled out more than $1 billion in bonuses so far this year while competitor Dollar Tree spent approximately $120 million between March and June on $2 hourly increases for its store and distribution workers. Numerous retailers ended hourly bonuses early in the summer, and several, including Stop & Shop and H-E-B, have announced additional bonus payouts in the back half of the year.

Dollar General has recently faced criticism for its treatment of employees. A report by UBS found that the chain pays its workers the least among 25 major U.S. retailers, including Dollar Tree and Walmart. Recent reports have also spotlighted the security risks dollar stores face, noting locations are frequent targets for robbery. Earlier this year, a former Dollar General employee sued the company for $1 million after getting injured during multiple armed robberies in 2017 and 2018 at the Texas store where he worked.

In addition to its bonuses, Dollar General is investing in store enhancements and self-distribution facilities that provide more fresh and frozen groceries. During the second fiscal quarter of this year, Dollar General’s comparable-store sales rose 18.8% while net sales increased 24.4% to $8.7 billion.