Dollar General has reported 29 consecutive years of growth. In its fourth-quarter results, reported earlier this month, same-store sales were up 4%.The dollar chain is bucking the retail trend and expanding rapidly in the United States. It plans to open 975 new stores in 2019 and remodel 1,000.It offers prices that are 20-40% lower than grocery and drug stores, capitalizing on a growing trend toward more cost-conscious shopping.Here's how Dollar General keeps its prices so low.Dollar General is taking over the United States.This no-frills, bargain-hunters' paradise is growing at a level that is largely "unthinkable" in retail, Credit Suisse analystswrote in June.In 2017, Dollar General opened new locations at a rate of around four stores a day. In 2018, it opened 900 stores, and in 2019, it plans to open 975 more.While competitors have been squeezed by growing competition online and from Amazon, Dollar General and the dollar-store sector, in general, have flourished, swooping in and offering customers prices that are 20% to 40% lower than grocery and drug stores. Earlier this month, it continued its 29-year long sales growth streak, reporting a 4% increase in same-store sales during the fourth quarter of 2018.Since it opened its first store in a small town in Kentucky in 1955, Dollar General has stayed true to its roots, predominantly serving rural and suburban low-income customers. The retailer's target shopper comes from a household making $40,000or less a year and isoften living in areas called "food deserts," meaning they are miles away from access to grocery stores.Here's how Dollar General keeps its prices low:SEE ALSO:We shopped at Dollar Tree and Dollar General to see which offered a better experience, and the winner was obviousIts stores are predominantly based in rural locations.The strategy in the early 2000s, when Dollar General started to grow, was to go where Walmart wasn't, David Perdue, Dollar General's chief executive from 2003 to 2007, told The Wall Street Journal.This has meant that the majority of its stores in the United States are located in rural and suburban areas, where they cost less to operate.Dollar General has 15,370 stores across 44 states. More than 45% of those stores are located in southern states, according to Moodys.It's a no-frills shopping experience.Dollar General doesn't own its stores, which helps to keep real estate costs down. Dan Nieser, the company's senior vice president of real estate and store development, told The Journal that it costs around $250,000 to open a new store, which is significantly less than what it costs a big-box retailer to build a new location.The stores are smalleraround 7,300 square feet, which is one-tenth the size of the average Walmart storeand have a bare-bones design. Think metal shelves,strip lighting, and cheap signage. It is truly a no-frills shopping experience, suitable for the customer who wants to get in and get out. According to Dollar General, the average shopping trip to its store lasts no more than 10 minutes.Not owning its real estate also allows the company to relocate stores quickly if they arent successful."If a store isn't doing as well as they like they will move it somewhere else," Danielle Dolinsky, research analyst at PlanetRetail RNG, told Business Insider. "This makes them more flexible than larger grocers that build the store from the ground up and need massive spaces."It has a limited selection of products."We don't carry every brand and size, just the most popular ones," Dollar General states on its website.Each store has between 10,000 and 12,000 unique products. Around 60,000 are found at a typicalsupercenter like Walmart.Carrying a limited number of items gives Dollar General more buying power with suppliers, as it buys in bulk.See the rest of the story at Business Insider
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