2020欧洲杯小组赛

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Dollar General's strategy was to go where Walmart wasn't, and it's paid off massively during the pandemic

Dollar General Dollar General
Dollar General is booming.
REUTERS/Jim Young

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  • Dollar General reported first-quarter earnings results on Thursday. Same-store sales surged, far outpacing its rivals including Walmart and Target. 
  • Analysts say the company was uniquely positioned to grow at a faster pace because it has stores in predominantly rural and urban areas. 
  • "Many households were reluctant to travel too far and some were nervous about visiting big box stores where it is very difficult to reduce dwell time," one analyst said. 
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Dollar General reported blockbuster .

Same-store sales surged by 21.7% during the quarter and net sales were up 27.6%, far outpacing both and grocery and big-box leaders such as Walmart and Target. 

While the chain benefited from an industry-wide trend for shoppers flocking to stores to stockpile on items during March and early April, analysts say it was able to be able to grow at a faster pace than its rivals because of the location of the majority of its stores. 

"Having products that are much in demand is one thing, but it doesn't fully explain why Dollar General grew at a much faster pace than the groceries market overall," Neil Saunders, managing director of GlobalData Retail said in a note to clients on Thursday.

2020欧洲杯小组赛He continued: "From our data, this comes down to the location of the stores which are mostly situated in rural or suburban areas which are underserved by other operators."

The majority of Dollar General's 16,500 stores are located in rural and suburban parts of America in small towns or close to neighborhoods. 

2020欧洲杯小组赛When the company started to expand in the early 2000s, its strategy , opening stores that were 40 miles from a Walmart. 

2020欧洲杯小组赛According to GlobalData Retail, 75% of the US population is now within five minutes of a Dollar General store. Meanwhile, 37% live within five minutes of a Walmart store, and 90% within 15 minutes of a Walmart. 

2020欧洲杯小组赛Saunders said its "localness" has been a major advantage during the pandemic. 

2020欧洲杯小组赛"Many households were reluctant to travel too far and some were nervous about visiting big box stores where it is very difficult to reduce dwell time.

2020欧洲杯小组赛"The dynamic was particularly strong for top-up purchases after households had done their initial bulk buy of essentials – which is why Dollar General continued to perform well once the initial period of stockpiling had subsided," he said.

Experts also say that having stores in predominately rural areas could stand Dollar General in good stead in the future as shopping increasingly shifts online during the pandemic. 

2020欧洲杯小组赛"Retailers that service predominantly lower-income rural areas with lower price points, where the awareness and risk might be lower and options for obtaining essential goods is fewer, might be able to maintain business as usual," Calvin Carter CEO and founder of digital consultancy agency Bottle Rocket, said in an email to Business Insider, when discussing whether retailers with no online presence have a future in a post-COVID-19 world.

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SEE ALSO: Retailers with limited or no online offering such as TJ Maxx, Ross, and Dollar General are at risk of becoming 'irrelevant' in a post-pandemic world, analysts say

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