Thanks to some sky-high prices, we've gotten more creative with our shopping choices over the past couple years. For many of us, that meant spending more time at dollar stores to save money. If your go-to discount chain is Dollar General, however, you might soon notice fewer options on your next shopping trip. During the company's most recent earnings call, CEO Ted Vasos revealed that Dollar General has decided to start pulling items from shelves.
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On Dec. 7, the dollar store chain released the financial results for its 2023 third quarter. According to the report, Dollar General's same-store sales decreased 1.3 percent, and its operating profit fell 41.1 percent. In an accompanying statement, Vasos acknowledged that the company was "not satisfied" with its performance during the quarter.
On the earnings call with investors that same day, the CEO opened up more about the company's downturn, and what they plan to do about it.
"We take our mission of serving others seriously and know that our customer is facing financial constraints, and communities are looking for strong partners in a tough macroeconomic environment," he said. "Historically, we've met those challenges head-on and delivered for our customer, and we believe that we are well positioned to do so now."
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According to Vasos, a major part of Dollar General's plan is centered around a "focus on getting back to the basics." That means pulling certain items from shelves: The CEO said the company has started working with merchants on how it can "drive simplification" for its stores and supply chain by reducing the number of products or stock keeping units (SKU) in its inventory.
"We have identified several opportunities to eliminate certain SKUs that have become less productive," he said on the call. "As our store teams have fewer SKUs to manage, we can lower our cost to serve, while driving higher inventory turns and higher sales of products that are most important to our customers."
While this means that shoppers may have less to choose from at Dollar General, Vasos said that he believes the act of pulling items from shelves will help the retailer "drive greater efficiencies over the longer term" by both reducing inventory and shrink.
"In summary, we are getting back to the basics here at Dollar General across all levels of the organization. Our desired results will not materialize overnight, but we believe we will see some early wins and continue to make progress toward executing on the fundamentals that have been foundational to our success over the past 85 years," Vasos concluded. "As a result, we believe we will significantly enhance the customer experience while driving higher sales and increased profitability in our business."
