The average Dollar General store had approximately 7,100 square feet of selling space and
was typically operated by a manager, an assistant manager, and three or more sales clerks.
Approximately 55% of the stores were in freestanding buildings, 43% in strip shopping
centers, and 2% in downtown buildings. Most of its customers lived within three miles, or a
10-minute drive, of the stores. The Dollar General store strategy featured low initial capital
expenditures, limited maintenance capital, low occupancy and operating costs, and a focused
merchandise offering within a broad range of categories, allowing the company to deliver
low retail prices while generating strong cash flows and investment returns. A typical new
store in 2009 required approximately $230,000 of equipment, fixtures, and initial inventory,
net of payables.
Dollar General generally had not encountered difficulty locating suitable store sites in the
past. Given the size of the communities that it was targeting, Dollar General believed that there
was ample opportunity for new store growth in existing and new markets. In addition, the
current real estate market was providing an opportunity for Dollar General to access higher
quality sites at lower rates than in recent years. Also, Dollar General believed it had significant
opportunities available for its relocation and remodel programs. Remodeled stores
required approximately $65,000 for equipment and fixtures while the cost of relocations was
approximately $110,000 for equipment, fixtures, and additional inventory, net of payables.
Dollar General has increased the combined number of remodeled and relocated stores to 450 in
2009 as compared to 404 in 2008 and 300 in 2007.11
The following chart shows the Dollar General’s four major categories of merchandise