How Dollar General Conquered Appalachia

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20180

DG

Less than a decade ago, a typical resident of Appalachia was close to an hour from the nearest chain store.

Yes, there was probably a local family owned convenience store that sold cigarettes, beer, and candy bars just “down of the holler”, but these places had high prices and very limited selection. Still, they were our beloved community stores, typically operated by a single person. Seven days a week, this man or woman, whose name the store was generally known by, could be seen manually punching prices into the cash-only register.

The names of these stores varied greatly, maybe “Ann’s”, “Steve’s Store”, or “Paul Ray’s Git-N-Go”, but whether you were in Pike County, Kentucky; Wythe County, Virginia; or some unknown town in North Georgia, it would make no difference, one of these places were close by and they were all pretty much alike.  To put it simply, these places were Appalachia.

Oddly enough, what seemed to be a staple of our region may be breathing its final breaths, and may soon be just another faint memory of a bygone era.

Today, it appears that the region’s retail businesses have been conquered by a company founded in Kentucky and now headquartered in Tennessee: Dollar General.

From March to July of this year, Dollar General opened 391 new stores, including its 15,000th store this past month, in Wilmington, North Carolina.

Though it remains to be seen what lasting effect these stores will have on the region, we may have already began witnessing some notable causalities, including Magic Mart, a company that had long served the region, but was reported this past month to be shuttering all of its stores.

However, before we go making Dollar General out to be some terrible titan rolling through the region, may we remind ourselves that the company is doing something very others seem to have the stomach to do lately: Invest in the Appalachian region, while at the same time raise the quality of life for residents in places such as Justice, West Virginia, or Neon, Kentucky, or Pound, Virginia.

No longer are local residents, the majority of which are struggling financially, forced to drive more than an hour and a half round trip to the nearest grocery store or Wal-Mart in order to purchase a gallon of milk or motor oil or shampoo at a fair and decent price.

It seems that Dollar General is actually doing something that folks have been praying for someone to do for decades now: Challenge Walmart.

But how have they been able to do this and why is it that they’re seeing success in a region where so many others have failed?

The answer may lie in the company’s long-term strategy to inundate rural America. Sure, their $20.3-billion annual sales revenue pales in comparison to Walmart’s +$500-billion, but their small stores aren’t created to compete against the giants, they’re designed to bring a taste of the giant stores to small towns… and it’s working exceptionally well.

The company’s recent bout of success can be traced back to the summer of 2007 when Dollar General assessed each of its locations in an effort to cut all stores it deemed to be “problematic”. This assessment included evaluating whether the location had a loading dock, garbage dumpsters, adequate parking, and acceptable profitability. Stores that did not pass this evaluation were relocated or closed. In total, more than 400 stores were closed as part of this initiative. Company leaders felt that prior to growing, it was critical to sever all dead weight or areas of difficulty.

The company then took its stock public in August 2009, which poured $750-million in capital into the company, paving the way for massive expansion into rural-America.

In the years ahead, the company rapidly expanded and has grown to become one of the most profitable stores serving America.

With sixteen distribution centers located in fourteen states and hundreds of stores located in each state of Appalachia, it’s becoming clear that Dollar General has succeeded in doing something the G-Men, revenuers, circuit riders and countless others have not been able to do: Conquer Appalachia.

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