Shopping cart in Dollar General filled with grocery products from the store's Clover Valley line
Photo: Dollar General

Dollar General is continuing its expansion into mainstream grocery through the addition of 100 more private label products to its Clover Valley line in 2023, including sauces, condiments, entrees, sides, and snacks. The new products, which range from flavored sunflower seeds to lobster bites and crab cakes, will help the retailer beef up its food offerings even further beyond the basics traditionally associated with off-price retailers.

The private label effort is part of Dollar General’s “Food First” initiative, which aims to provide the retailer’s customers with access to healthier options, including more fresh food.

While Dollar General doesn’t consider itself a true grocer, about 80% of the brand’s stores are in communities with 20,000 or fewer people, often in rural areas. Many of these shoppers rely on its stores for their household essentials.

“We have made significant enhancements to our private brands in 2023, and we know how important these value offerings are for our customers,” said Dollar General EVP and Chief Merchandising Officer Emily Taylor in a comment regarding the news. “We believe these products will further differentiate Dollar General in the marketplace as we look to provide our customers with tremendous value on quality products.”

The Food First initiative is also supported by the DG Fresh supply chain network, which launched in 2019 and focuses on the self-distribution of frozen and refrigerated products. As of May 2023, the DG Fresh network was delivering to more than 19,000 stores from 12 facilities across the country. A dual distribution center that combines the efficiencies of the traditional and DG Fresh supply chain networks is slated to open this summer in Blair, Nebraska.

This emphasis on grocery is further enhanced by Dollar General’s plans to make 80% of all new stores and nearly all store relocations in fiscal 2023 utilize one of the retailer’s larger formats. This will enable them to house additional cooler space and sell fresh produce, which is currently available in nearly 3,900 locations with plans to reach 5,000 by January 2024.

It’s no surprise that Dollar General is making private label an important part of its ambitious food strategy. U.S. store brand sales across all retail outlets grew 8.2% in a 24-week period that ended June 18 compared to the same period in 2022, while national brands grew 5.2% in the same span, according to data from Circana, a Chicago-based market research firm. It’s not just grocery-adjacent retailers riding their success, either — Macy’s wants to make private brands account for 20% of sales, up from 16% in 2022.

BrainTrust

“Food is the ultimate recurring revenue steam, and programs like Food First that provide even more healthier choices should be very well received.”

Mark Ryski

Founder, CEO & Author, HeadCount Corporation


“Private label helps bolster the entry tier of products, which demonstrates good value.”

Neil Saunders

Managing Director, GlobalData


“Shoppers will continue to gravitate to DG – whether because of accessibility or perceived affordability.”

Dave Wendland

Vice President, Strategic RelationsHamacher Resource Group

Discussion Questions

DISCUSSION QUESTIONS: How can the expansion of private brands help Dollar General, already a well-established retailer in terms of pricing, further differentiate its value proposition from competitors? What role can the Food First initiative help in ending food deserts, particularly those in rural areas?

Poll

What factor is most responsible for making private label brands increasingly attractive to consumers in recent years?

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8 responses to “Dollar General Adds 100 Private Label Items in Food Accessibility Push”

  1. Neil Saunders Avatar
    Neil Saunders

    This is a good strategy that underpins two priorities for Dollar General. The first is to improve the food offer, especially in categories like fresh. This helps to increase average basket sizes and drives better footfall as consumers come to, and use, Dollar General for more of their grocery requirements. Incidentally, it also helps Dollar General overcome some of the criticism that it contributes to the problem of food deserts. The second priority is to ensure that low-price perceptions don’t slip as others, like Aldi and Walmart, double down on prices. Private label helps bolster the entry tier of products which demonstrates good value.  

  2. Mark Ryski Avatar
    Mark Ryski

    With their enormous store footprint covering hard to reach corners of the market, Dollar General has a significant opportunity to expand their offering and enhance their margins through private label brands, just as so many other grocery players have done. Food is the ultimate recurring revenue steam, and programs like Food First that provide even more healthier choices should be very well received. 

  3. Dave Wendland Avatar
    Dave Wendland

    I believe Dollar General has officially established itself as a “destination” for groceries. With plans to make 80% of their stores utilize one of the retailer’s larger formats, there is increased focus on fresh produce and expanded cooler space in each. Shoppers will continue to gravitate to DG – whether because of accessibility or perceived affordability. And this commitment to private label doubles down on their commitment to the category and building profit across their grocery assortment.

  4. Gene Detroyer Avatar
    Gene Detroyer

    Healthier food options? Really? Cookies and Cream Trail Mix? Ranch Sunflower Seeds? Chilli and Lime Chips? How processed do you imagine the Lobster bites are? This sounds more like choices one would find in a convenience store.

    I commend them for expanding their fresh options. Fresh could be the big reason consumers go to DG more regularly, which will also increase sales across the store.

  5. Gary Sankary Avatar
    Gary Sankary

    Private label is a sound strategy in food. If the products are of good quality, private labels can drive loyalty and grow margins. Food is also a frequency driver. Having stronger assortments of fresh items will help Dollar General win wallet share as customers can complete more of their shopping list in one spot, moving Dollar General to the first stop on many customers’ shopping runs.

  6. Richard J. George, Ph.D. Avatar
    Richard J. George, Ph.D.

    Dollar General recognizes the importance of food products to its overall success. In doing so, it finds itself competing more with traditional grocery stores than DG’s extreme value cousins. In addition, the own label strategy gives customers permission to drive past all of the above noted competitors in search of uniquely offered food products. DG has learned that own or private label brands are as much about product differentiation, not simply price advantages.

  7. Brian Cluster Avatar
    Brian Cluster

    Dollar General’s strategy to expand its private brand offerings is sound considering DG’s overall strategy of value retailing and the fact that many of its consumers are battling inflationary pressures of food. By expanding the range to more categories, they answer the need of their consumers and build more brand loyalty to their Clover brand. These products can be an excellent cost saver for households. A perfect example is the Clover coffee pods which can be very competitive at $12.50/36ct in my market. The key is to balance the true value-oriented products vs. the introduction of higher-end products (crab cakes) that may appeal to newer consumers.

    The other strategy of adding fresh sections in stores is critical to serving market areas within limited options. Being a food retailer without even the basic offering of fresh products can be an inconvenience to consumers and creates an opportunity for the shopper to split more of the food shop across more retailers. The Dollar General Market Format addresses these needs to offer fresh products very well.

  8. BenedictEnterprisesLLC Avatar
    BenedictEnterprisesLLC

    The growth in private brands permeates a number of retail formats and consumer products categories these days, but there are few cases where it makes more sense than at Dollar General.

    Their commitment to the opening price point makes this a logical move for their cash-strapped target consumer and will serve to grow profit margins and increase customer loyalty. Key to their success however will be improved performance in managing inventory in-stock levels and store presentation of these products with effective visual merchandising. These are both areas when they have been “challenged” in recent years and could serve to derail an important strategic initiative for their company.

    Despite my reservations, I’m rooting for their success in this effort both for their benefit and for their consumer that could truly benefit from the value these products represent.

8 Comments
oldest
newest
Neil Saunders
Neil Saunders
8 days ago

This is a good strategy that underpins two priorities for Dollar General. The first is to improve the food offer, especially in categories like fresh. This helps to increase average basket sizes and drives better footfall as consumers come to, and use, Dollar General for more of their grocery requirements. Incidentally, it also helps Dollar General overcome some of the criticism that it contributes to the problem of food deserts. The second priority is to ensure that low-price perceptions don’t slip as others, like Aldi and Walmart, double down on prices. Private label helps bolster the entry tier of products which demonstrates good value.  

Mark Ryski
Mark Ryski
8 days ago

With their enormous store footprint covering hard to reach corners of the market, Dollar General has a significant opportunity to expand their offering and enhance their margins through private label brands, just as so many other grocery players have done. Food is the ultimate recurring revenue steam, and programs like Food First that provide even more healthier choices should be very well received. 

Dave Wendland
Dave Wendland
8 days ago

I believe Dollar General has officially established itself as a “destination” for groceries. With plans to make 80% of their stores utilize one of the retailer’s larger formats, there is increased focus on fresh produce and expanded cooler space in each. Shoppers will continue to gravitate to DG – whether because of accessibility or perceived affordability. And this commitment to private label doubles down on their commitment to the category and building profit across their grocery assortment.

Gene Detroyer
Gene Detroyer
8 days ago

Healthier food options? Really? Cookies and Cream Trail Mix? Ranch Sunflower Seeds? Chilli and Lime Chips? How processed do you imagine the Lobster bites are? This sounds more like choices one would find in a convenience store.

I commend them for expanding their fresh options. Fresh could be the big reason consumers go to DG more regularly, which will also increase sales across the store.

Gary Sankary
Gary Sankary
8 days ago

Private label is a sound strategy in food. If the products are of good quality, private labels can drive loyalty and grow margins. Food is also a frequency driver. Having stronger assortments of fresh items will help Dollar General win wallet share as customers can complete more of their shopping list in one spot, moving Dollar General to the first stop on many customers’ shopping runs.

Richard J. George, Ph.D.
Richard J. George, Ph.D.
8 days ago

Dollar General recognizes the importance of food products to its overall success. In doing so, it finds itself competing more with traditional grocery stores than DG’s extreme value cousins. In addition, the own label strategy gives customers permission to drive past all of the above noted competitors in search of uniquely offered food products. DG has learned that own or private label brands are as much about product differentiation, not simply price advantages.

Brian Cluster
Brian Cluster
8 days ago

Dollar General’s strategy to expand its private brand offerings is sound considering DG’s overall strategy of value retailing and the fact that many of its consumers are battling inflationary pressures of food. By expanding the range to more categories, they answer the need of their consumers and build more brand loyalty to their Clover brand. These products can be an excellent cost saver for households. A perfect example is the Clover coffee pods which can be very competitive at $12.50/36ct in my market. The key is to balance the true value-oriented products vs. the introduction of higher-end products (crab cakes) that may appeal to newer consumers.

The other strategy of adding fresh sections in stores is critical to serving market areas within limited options. Being a food retailer without even the basic offering of fresh products can be an inconvenience to consumers and creates an opportunity for the shopper to split more of the food shop across more retailers. The Dollar General Market Format addresses these needs to offer fresh products very well.

BenedictEnterprisesLLC
BenedictEnterprisesLLC
8 days ago

The growth in private brands permeates a number of retail formats and consumer products categories these days, but there are few cases where it makes more sense than at Dollar General.

Their commitment to the opening price point makes this a logical move for their cash-strapped target consumer and will serve to grow profit margins and increase customer loyalty. Key to their success however will be improved performance in managing inventory in-stock levels and store presentation of these products with effective visual merchandising. These are both areas when they have been “challenged” in recent years and could serve to derail an important strategic initiative for their company.

Despite my reservations, I’m rooting for their success in this effort both for their benefit and for their consumer that could truly benefit from the value these products represent.