Dollar General will open 635 new stores next year, building on the 625 stores the retail giant is on track to open by the end of 2012.
The company’s “research model show as we could double the size of the chain,” Chairman and CEO Rick Dreiling told investors on Dec. 11. “I mean, there is over 10,000 opportunities for Dollar stores out there.”
Delaying a more aggressive ramp-up in store openings is that consumers are still cautious and the Goodlettville, Tenn-based chain faces pricing competition. Dollar General’s profit rose 21.3 percent year-over-year to $207.7 million in the third quarter, as revenue jumped 10.3 percent to nearly $4 billion in the same period. The discount retailer said improved supply chain operations helped offset higher markdowns and lower price hikes, according to a SeekingAlpha transcript.
“Actual fuel rates were up about 6 percent from last year, but we achieve leverage on transportation from reduction in stem mile and improve carton per truck” said David Tehcle, the company’s chief financial officer.
To handle growing store volume, Dollar General began construction on a distribution center in Pennsylvania. The company’s 12th distribution center will open in the first quarter of 2014. The company also said it has improved inventory management, with the number of out-of-stock items down by nearly half from two years ago.