Dollar General is angling to take a bite out of Walmart’s loyal-by-default customer base across rural America by opening a new distribution center in eastern Texas.
The Tennessee-based corporation (NYSE: DG) announced a plan Wednesday to continue expansion with the opening of a distribution center in Longview, Texas, that is projected to yield roughly 400 new jobs once fully operational, according to Nasdaq. The report notes that the plant will serve 1,000 stores throughout the southeastern United States. Texas opened its first distribution center in San Antonio in 2016.
Analysts and the company itself note that despite the looming domination of e-commerce giant Amazon over traditional retail stores, Dollar General has found and expanded a niche with limited market competition. The discount retailer plans to open 900 new brick-and-mortar locations in 2018 alone—on pace with the previous year’s growth. CNN Money notes that DG currently holds 14,000 stores in 44 states, up 35 percent from 2012. Stock shares climbed 25 percent in 2017.
“Our first priority remains investing in new stores where we continue to see great returns,” said CFO John Garratt in an investors call in December. The conference projected that by the end of 2017, 75 percent of Americans will live within a five mile drive of a store.
Dollar General’s reported success comes from a combination of low overhead and targeting rural areas where big boxes and drug store giants like CVS and Walgreens may not see economic viability according to their standard scale stores. Even in small communities with Walmart Supercenters, DG can siphon the penny-pinching shopper in need of only a single item.
CNN Money added the company’s core customer base, lower-income Americans, came to their stores in droves in 2008 and 2009 but have remained loyal despite the economic upturn.