Dollar General will open 1,000 stores in 2020 as the discount retailer builds on the momentum of a strong quarter. The company reported a net sales increase of 8.9% and a same-store sales increase of 4.6% for Q3 2019, which were the retailer’s best results in nearly five years.
The new openings will be complemented by 1,500 store remodels and 80 relocations as Dollar General executes its real estate plans. The planned expansion, which is even bigger than the 975 store openings in 2019, will allow the company to “serve more customers and communities with our innovative mix of store formats,” according to Todd Vasos, CEO at Dollar General in a statement.
“We are excited to accelerate our real estate growth plans in 2020,” Vasos added. “The sustained positive results we are seeing from our portfolio of real estate projects further validates our belief that our ongoing investment in high-return real estate projects, along with our strategic initiatives, is the best use of our capital as we look to continue delivering long-term shareholder value.”
The retailer is projecting that net fiscal 2019 sales growth will reach the low 8% range, while same-store sales growth will hit the mid-to-high 3% range. The forecast assumes Dollar General will be able to mitigate, absorb or otherwise offset the impact of tariffs on goods from China.
Dollar General’s positive outlook in the face of potential trade disruptions is in contrast to rival Dollar Tree, which expects tariffs to add $19 million to its costs of goods for Q4 2019, driving growth down to the low single digits. Dollar Tree is also feeling additional pressure on merchandise margins, increased payroll costs and increased run rates for maintenance.