Dollar General has announced a significant investment aimed to take control of its own frozen and fresh distribution operations, a new report from CSPDailyNews has revealed. The Goodlettsville-based retailer kick started the DG Fresh initiative through a cold-storage facility located in Pottsville, Pennsylvania earlier this year, when it began distributing perishable items to about 300 stores.
During a conference call on fiscal 2018 results CEO Todd Vasos said the company aims to distribute its own frozen and fresh foods to as many as 5,000 stores by the end of its fiscal year next January, and chainwide in three to four years. The discount retailer has used frozen & refrigerated foods, as well as fresh to help build store traffic. But up until now, these food items have been supplied by a variety of regional distributors. The company’s DG Fresh initiative was designed to provide greater variety including healthier items, while also helping to maintain better stock conditions at stores. However, as Vasos noted there were many items the company could not cost effectively procure through their current model.
An expert cited by the report stated that self-distribution is bound to help Dollar General differentiate itself, as well as compete more directly with rivals in the supermarket business by offering more variety, while also lowering costs. He also said the move could see the difference between upcharges of 25% to 35% vs 3.5% to 5.5%.
On top of DG Fresh, Dollar General is also set to launch a program called “Fast Track” that will speed both the process of stocking shelves, as well as allowing customers checking out via the self-checkout option to do so faster.
According to the information, Dollar General announced it will open 957 new stores in fiscal 2019 and has plans to renovate another 1,000. About 200 stores will be upgraded with fresh produce departments.
