The exterior of a Dollar General supermarket on August 30, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Dollar general is testing same-day delivery to customers' homes as the major discounter tries to fend off stiffer competition Walmart.
During an earnings call Thursday, Dollar General CEO Todd Vasos said the retailer “soft” launched the delivery program in September. Now it offers same-day delivery to about 75 stores, he said. It is offered through an outside company, which he did not name.
“We've always said here, 'We're going to do delivery our way when it's time,'” Vasos said. “We believe it's time.”
He said the company expects to eventually expand the offering to “thousands of stores.”
With same-day delivery, the Tennessee-based dollar store is recognizing the push from other retailers like Walmart, Amazon and Temu that offer convenience and low prices. For example, Walmart has significantly expanded its online business and posted double-digit U.S. e-commerce gains for 10 straight quarters as it offers curbside pickup and faster home deliveries.
Dollar General, on the other hand, typically doesn't share updates or specific numbers on its e-commerce business in quarterly earnings because it relies heavily on brick-and-mortar sales.
Still, Dollar General has felt the pressure of both economic challenges and its own strategy over the past year. Consumers, especially low-income households, have withdrawn their discretionary purchases due to the cumulative effect of high inflation. Dollar General also paid millions of dollars in fines for shoddy stores and blocked emergency exits, which posed both a workplace safety hazard and a potential turnoff for shoppers.
In recent months, Dollar General's CEO has talked about losing market share to Walmart. Vasos said at a Goldman Sachs retail conference in September that “the guys in Bentonville [the Arkansas home of Walmart’s headquarters] took a slightly larger share of the retailer's middle-income customer base.
Vasos said the company launched its own program after learning from DoorDash deliveries, which are available in about 16,000 of its stores.
The new offering, DG Delivery, is available to customers at select stores, according to Dollar General's website. Customers place orders through Dollar General's app and can get same-store prices and delivery within an hour. The program also accepts digital coupons and offers cash back rewards.
According to the website, DG Delivery does not appear to charge fees or have a minimum order requirement.
During Dollar General's earnings call on Thursday, Vasos said Dollar General is still working on its business model for its online offerings, but it will rely on labor from a third party rather than using store employees or delivery drivers employed by the company . He said same-day delivery is also an opportunity to grow the retailer's advertising business as customers would use the app more often when placing orders.
But the option is still available in only a small portion of Dollar General stores. It has more than 20,000 stores across the country, including many in rural US
