Dollar General Bets Big on Stores With Nearly 4,900 Projects in 2025

Retail is being rewritten in real time as price-pressured shoppers chase value.

Dollar General said during its Thursday (Aug. 28) second-quarter 2025 earnings call that its business model is finely tuned to these shifting consumer dynamics.

“We are pleased with our strong second-quarter results, including earnings growth that significantly exceeded our expectations,” Dollar General CEO Todd Vasos said in a Thursday press release. “Our improved execution, along with our progress advancing key initiatives, is resonating with both existing and new customers as we further enhance our value and convenience proposition.”

For the 13 weeks ended Aug. 1, Dollar General reported net sales of $10.7 billion, a 5.1% increase from $10.2 billion in Q2 2024. Net income reached $411 million, up 10% from $374 million in Q2 2024.

While traditionally serving lower-income households, Dollar General increasingly attracts middle- and high-income shoppers trading down amid rising costs and seeking bargain alternatives for routine needs.

Read also: As Households Stretch Paychecks, Off-Price Retail Stretches Profits

For fiscal 2025, the company expects approximately 4,885 real estate projects, including 575 new stores in the United States and up to 15 in Mexico, the release said. Nearly 4,250 remodels will be completed across the two major initiatives.

This level of construction and remodeling is unmatched in the U.S. discount sector and reflects Dollar General’s conviction that small-box convenience remains a durable retail format even in an age of eCommerce and big-box consolidation.

In the three-month period representing Q2, the company opened 204 new stores, remodeled 729 locations under “Project Elevate,” remodeled 592 more under “Project Renovate,” and relocated 15 stores, the release said.

Projects Elevate and Renovate are not merely cosmetic. Elevate is designed as a partial remodel that refreshes merchandising, reduces maintenance costs and enhances customer experience. Renovate involves full remodels that upgrade layouts, product selections and equipment. Both are intended to improve the balance between the company’s low-margin, high-traffic consumable goods and its high-margin, non-consumable goods.

See also: Discounts Lure High-Income Customers to Dollar Stores

Dollar General’s management commentary on Thursday’s earnings call illustrated the precarious environment its shoppers face. The company’s core customers are disproportionately affected by inflation, higher rent and energy costs, and resumed student loan repayments. While food and household goods sales have held up, discretionary spending in seasonal, home and apparel categories remains pressured.

The sales mix underscores this tension. Consumables accounted for more than 82% of sales in Q2, rising 5% year over year to $8.82 billion, per the press release. Seasonal and home products grew more modestly, while apparel posted only slight gains. The heavy weighting toward consumables secures traffic but dampens gross margin expansion.

PYMNTS Intelligence’s July Paycheck-to-Paycheck research showed that 78% of low-income households, defined as those earning less than $50,000 a year, and 66% of middle-income households, defined as those earning between roughly $50,000 and $100,000 a year, said they were living paycheck to paycheck in June.

Perhaps the most telling shift in strategy involves Popshelf, Dollar General’s relatively new retail concept aimed at high-margin categories like home décor, beauty and seasonal goods. Originally envisioned as a growth vector, pOpshelf has faced headwinds in the current environment. In Q2, the company operated 180 standalone locations, but it has paused new openings in 2025, Business Back reported Sunday (Aug. 24). Some Popshelf sites are being converted back to Dollar General stores.

Despite its brick-and-mortar foundation, Dollar General continues to invest in digital channels. The company partnered with Uber Eats this month to deliver household essentials. In September 2024, it launched same-day home delivery via its own app and website in select markets. That service is rolling out more broadly in 2025, positioning Dollar General to compete for convenience with grocery delivery providers and Walmart’s expansive online network.

Research by PYMNTS Intelligence has tracked the impact of tariffs on consumers throughout the spring and summer. For example, the June report, “Stock Out. The Impact of Tariffs on Consumer Product Prices and Availability,” showed 47% of U.S. shoppers said they could not find or afford everyday items because tariffs led to supply chain disruptions or higher price tags.

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