Dollar General (DG) has been in the news lately, but not necessarily for a good reason. Like many businesses, Dollar General has been plagued with being understaffed while having a dramatic increase in customers coming in the door.
The discount retailer has had just about a 20% increase in traffic from January 2020 to January 2023, according to Placer.ai.
Dollar General pays on the low end of wages, according to a survey by retail consulting firm, Korn Ferry. Most retailers have increased pay in order to be more competitive and retain workers. However when fellow retailers Target and Kohls are paying higher wages, it's difficult for Dollar General to retain its employees with significantly lower pay.
Dollar General was in some trouble in Georgia when the Department of Labor cited the company for multiple workplace safety violations at several locations that may have been caused by the understaffing or poor training of employees. Violations included products being stacked dangerously, blocking an exit route, and blocking an electrical panel.
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Dollar General Makes a Surprising Investment
Since staffing has been a problem, Dollar General might consider investing in staff, but hasn't indicated that staffing will be a primary focus of the company's latest $100 million financial commitment. Dollar General, however, plans to invest in expanding its beauty and self-care items.
Both retailers Target and Kohl’s have made investments in beauty and self-care recently as well. Target (TGT) and Ulta Beauty (ULTA) have launched a partnership with Target offering a new more elite self-care and beauty shopping experience. Kohl’s (KSS) also has expanded its partnership with Sephora (LVMHF) to offer a higher level of self-care and beauty products.
Dollar General's expansion of beauty and self-care products includes the company’s own brand, Believe Beauty, which has a range of beauty products that are priced at $6 or less. The Believe Beauty Brand is cruelty-free, vegan, and does not have any parabens, mineral oils, petroleum or animal by products in them.
Dollar General plans to expand its beauty brand layout “Beauty Reinvention” into 300 new stores. This expansion is set to include more than 1,000 beauty products, including brand exclusive with Curl Rhythm, Joy Works, Yes! Honey, according to Retail Dive.
“At DG, we are always listening to our customers, and in response we are investing in and expanding our beauty, skin and hair care offerings to meet their needs,” said Amanda Wilson, Dollar General’s senior beauty buyer. “Springtime marks an important moment to reset and refresh your self-care routine. We are excited to welcome new products that encompass the quality, performance and affordability that is expected from our brands and hope our shoppers enjoy the new experience.”
Dollar General's Critical Needs
While Dollar General has seen increased foot traffic, it hasn't always kept up with demands to get products safely and effectively on to shelves, which could be related to supply issues and/or staffing shortages. If products aren’t on the shelves, it doesn’t matter how many people come through the retailer's doors if the products are still in boxes and inaccessible to customers. However, the company hasn't indicated if some of its $100 million investment will be spent on increased staffing.
