Dive Brief:

• Dollar General now offers fresh fruits and vegetables at more than 5,000 locations, pushing the discount chain past a goal it laid out early last year.
• The retailer is also deploying AI-based perishable food-ordering technology from Shelf Engine and plans to bring the platform to about 3,000 stores by the end of fiscal year 2023.
• Dollar General has sought to increase its presence in the grocery sector amid a continuing drive by the company to expand its store count and boost growth.

Dive Insight:

Dollar General’s push to bring fresh food to more stores has come as the retailer has shaken up its strategy in a bid to improve its financial performance.

The company runs more than 19,000 stores in 48 states and is continuing to expand its footprint, although it plans to add fewer stores in 2024 than it did last year. Dollar General posted better results than analysts had expected during its latest quarter, when it opened 263 stores, but would have lost market share during the period without the new locations, according to analysts.

Jeffery Owen, Dollar General’s former CEO, announced the company’s intention to offer produce in at least 5,000 stores by the end of 2023 during an earnings call last March — just a few months before he was dismissed from his post “to restore stability and confidence.”

In a Friday press release about its produce expansion, Dollar General drew attention to the role it plays in providing access to grocery staples. About 80% of the retailer’s stores serve communities with a population of 20,000 or less, and people in these areas often depend on Dollar General to purchase essentials like milk, eggs, cheese, and frozen and canned vegetables, the company said.

“We are constantly looking for ways to better serve our customers and one of our top priorities is to ensure the communities we call home have access to fresh, affordable, and convenient food options,” Emily Taylor, Dollar General’s executive vice president and chief merchandising officer, said in a statement. 

Dollar General added that it now distributes produce at more individual locations than any other grocer or mass retailer in the United States, although the company offers consumers a much smaller selection of perishables than its competitors. The retailer’s “curated assortment” of fresh fruits and vegetables includes tomatoes, apples, strawberries, potatoes, lemons and salad mixes, according to the press release.

In addition to adding fresh foods to additional locations, Dollar General has taken steps to boost sales of frozen and refrigerated items through an internal distribution initiative known as DG Fresh. The company believes DG Fresh could allow it to eventually bring produce to more than 10,000 stores, Owen said during an earnings call last August.