Walmart Losing Millennial Customers to Dollar General

Teri Webster - Author
By

May 29 2016, Updated 1:08 a.m. ET

Walmart better watch out for Dollar General.

In an economy where many stores are struggling, Dollar General is cashing in on younger shoppers. Millennials – customers around ages 18 to 34 – are spending their dollars at Dollar General, according to Fortune.com.

How much are the spending much? About $1.26 billion or 24 percent of sales last quarter, to be exact. The numbers are even more impressive since millennials only account for about 12 percent of all sales. In other words, they’re spending roughly twice as much as shoppers in other age brackets, and it shows no signs of slowing down. Dollar General is set to open 900 new stores in 2016, followed by 1,000 more in 2017, Fortune.com reported. After 2017, Dollar General will have about 15,000 locations.

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The convenience of the smaller stores is believed to be one reason. Shoppers usually have to drive a shorter distance to get to a Dollar General. Then, there’s not a lot of walking to find the items they need. Dollar General’s stores are typically 7,400-square feet, compared to the typical Walmart Super Center, which can be as large as 260,000 square feet.

What’s inside a Dollar General that gives it appeal for younger customers? Like Walmart, prices are low, and stores are increasing the variety of food items, including more choices for healthier foods, according to Fortune.com.

Dollar General recently added 23,000 coolers in 9,000 stores to offer a bigger variety of food items. Some stores are now selling fresh fruits and vegetables. In an effort to keep shoppers and promote more-popular healthy eating habits, many Walmarts are updating their fruit and vegetable sections.

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