Dollar General/Family Dollar Case Study

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Kelli Moore Retailing (MG 181) Dollar General/Family Dollar Case Study 4/6/16 Walmart is the largest retailer in the world and is the second largest retailer, behind Amazon, in the United States. The majority of households in America shop at Walmart on a regular basis. However, Dollar General and Family Dollar have increasingly gained market-share over the years. Both stores are considered extreme value retailers. By definition, extreme value retailers are small, full-line discount stores that offer a limited merchandise assortment at very low prices. In 2005, Goodlettsville, Tennessee-based Dollar General had over 7,500 stores in 30 states and more than $7 billion in sales. The company has grown more than 20% each year for…show more content…
Dollar General and Family Dollar stores are typically much smaller than other discount retailers like Walmart and Kmart, averaging 6,000 to 8,000 square feet in size. This allows the retailers to easily find good locations in almost any market they choose to enter. Most of their stores are located in small towns in the Southeast where the companies are headquartered. However, more recently they are opening stores in suburban area strip shopping centers in retail spaces abandoned by drugstores that have moved to stand-alone locations. In the past, Dollar General and Family Dollar stores were typically only found in low-income communities or in areas that were too small to support a large discount store like Walmart or Kmart. The residents of these communities appreciated the convenience they offered. While both retailers still advertise using sales circulars, they have reduced their overall advertising expenses in recent years. This has allowed both companies to make significant money-saving investments in point-of-sale terminals, store-level inventory tracking systems, automated distribution centers, space allocation software and replenishment systems to reduce stockouts and increase inventory turnover. DISCUSSION QUESTIONS 1.) The target market for extreme value retailers is really anyone who wants to save money but historically their main target is rural and urban shoppers, low-to-middle income young families, ethnic groups and
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