Dollar General tries same-day delivery to challenge Walmart dominance
- Dollar General has initiated a same-day delivery program at around 75 stores as part of a strategy to improve competitiveness.
- The program, named DG Delivery, allows customers to order through the app with deliveries available in as little as one hour and no extra fees.
- This move indicates that Dollar General is responding to competitive pressures from larger retailers and is working towards expanding its digital presence.
In the United States, Dollar General has initiated a same-day delivery program in a bid to enhance its competitive edge against larger retailers like Walmart and Amazon. Launched quietly in September, this initiative is currently available in approximately 75 locations across the country. The grocery chain has partnered with an unnamed third-party service to facilitate this delivery option, allowing customers to place orders through Dollar General's app and receive these products in as short a timeframe as one hour. Prices for delivery reflect those in-store without added delivery fees or minimum order requirements. CEO Todd Vasos emphasized the importance of this ad hoc program during an earnings call and indicated a broader rollout is anticipated, potentially reaching thousands of stores nationwide. The company’s shift towards offering same-day delivery signifies recognition of the evolving retail landscape, where speed and convenience play crucial roles for consumers. Additionally, while Dollar General has not disclosed specific statistics related to its e-commerce growth, Vasos noted a shift towards utilizing a delivery model that relies on external labor rather than internal staff. The launch of this delivery service is reflective of broader trends seen in the retail industry, particularly as rivals like Walmart have significantly bolstered their online services, leading to consistent double-digit growth in e-commerce sales over multiple quarters. This competitive pressure has compelled Dollar General to adapt its traditional brick-and-mortar model to meet changing consumer demands. Although the delivery service is currently limited to a small fraction of the over 20,000 Dollar General stores nationwide, the company’s strategy aims to enhance engagement through increased app usage, which could integrate advertising opportunities in the future. The initiative also comes at a time when Dollar General is grappling with various challenges, including external economic pressures and internal operational issues, resulting in fines related to store safety. By launching a same-day delivery option, the chain seeks not only to retain current customers dissatisfied with its limited delivery options but also to attract a new demographic interested in quicker shopping solutions. Therefore, this step towards embracing e-commerce could pave the way for a more resilient business model moving forward.