By CultureBanx Team
- Dollar General is opening new “Popshelf” stores aimed at suburban shoppers
- 39% of African Americans live in the suburbs
Discount retailer Dollar General (DG -0.52%) has strong ambitions to win over more high-end consumers by opening new “Popshelf” stores aimed at suburban shoppers. This shopping concept will offer seasonal and home décor, health and beauty must-haves, and 95% of the items will be priced at $5 or less. As Dollar General wades deeper into the suburbs where 39% of African Americans live, just how valuable will the Black dollar become for the company’s bottom line?
Why This Matters: Dollar General’s initial targeted customers are primarily going to be women who are located in diverse suburban communities, with a total household annual income ranging from $50,000 to $125,000. Typically, the low-cost chain has largely catered to customers on a tight budget to shop at the company’s more than 16,000 stores. Right now their average shopper comes from a household that earns $40,000 or less per year. In 2017, the U.S. Census Bureau released data showing the median income for an African American household was $39,490, putting them right in the Dollar General consumer sweet spot.
African American spending power expected to grow to $1.8 trillion by 2024
Moving to the suburbs have become increasingly more diverse, with 39% of African Americans calling the area home in 2014, according to the Brookings Institute. That’s a noticeable shift from 2000, when only 33% of African Americans lived in the suburbs, and exactly why they should be on Dollar General’s radar. Not to mention the $1.4 trillion dollars in spending power that they possessed in 2019, which is expected to grow to $1.8 trillion by 2024, according to the Selig Center for Economic Growth.
So far the discount chain’s same store sales increased 18.8% during the second quarter of this year. To keep sales going with its new Popshelf concept tapping into diverse suburbs will be key. The company’s stock has gained about 40% so far this year, bringing its market cap to more than $54 billion.
What’s Next: Even before the recession, the discount retailer was growing rapidly and this next phase of suburban growth should be just as strong. Dollar General’s first two Popshelf locations will open near Nashville this fall with the company expecting to open another 30 locations by the end of fiscal year 2021.
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