How Many Stores Does Dollar General Operate in the US and Why Are They Closing Stores?

Dollar General announced plans to close around 1,000 underperforming stores across the U.S

Dollar General has long been a fixture in America’s retail scene, especially in rural and underserved areas. As of January 31, 2025, Dollar General operates 20,594 stores across the United States. This figure is up from 19,986 stores on February 2, 2024, reflecting the company’s ongoing, but more measured, expansion strategy.

Steady Growth, But Signs of Retrenchment

Over the past few years, Dollar General maintained a steady pace of store openings. In the last fiscal year alone, the company opened 725 new stores, following 987 new stores the year prior. However, the company has also been closing stores, signaling a shift in strategy. In fiscal year 2024, 117 stores were shuttered, up from 105 closures the year before.

In its latest earnings report, Dollar General confirmed it will close 96 stores in the first quarter of fiscal year 2025. Additionally, the company plans to shut down 45 stores under its pOpshelf brand, with six of them being converted into traditional Dollar General locations.

The company closed 27 stores in January 2025 alone and has forecasted the opening of 575 new stores in the U.S. throughout the rest of 2025.

Why Is Dollar General Closing Stores?

While Dollar General is still opening more stores than it is closing, the number of closures and the decision to conduct a thorough portfolio evaluation mark a notable change. According to CEO Todd Vasos, the closures represent less than 1% of Dollar General’s total store count but are part of a strategy to “better position the company to serve its customers and communities.”

Several factors are driving this decision.

Performance Pressures

Although Dollar General’s top-line revenue grew in fiscal 2024, the bottom line tells a more complex story. The company reported $40.6 billion in net sales for fiscal 2024, a 5% increase compared to $38.7 billion in fiscal 2023. Same-store sales also rose modestly by 1.4%, driven by a 1.1% increase in customer traffic and a 0.3% increase in average transaction size.

However, net income fell sharply. Dollar General posted $1.1 billion in net income for fiscal 2024, a significant 32.3% decrease compared to $1.7 billion in fiscal 2023. Rising costs, inflationary pressures, and operational challenges have squeezed margins, leading to tougher decisions regarding store performance.

Cost Pressures and Market Dynamics

Inflation has driven up costs across the retail sector. Dollar General, which relies on high-volume, low-margin sales, is particularly vulnerable. As costs for labor, transportation, and goods have increased, the company has faced difficulty maintaining its historical margins. Additionally, wage increases in many states have contributed to higher operating costs.

Dollar General’s target demographic—primarily lower-income consumers—has also been hit hard by inflation, leading to more cautious spending behavior, even at discount chains.

Market Saturation and Strategic Refocusing

Another key factor is market saturation. Dollar General’s aggressive expansion strategy over the last decade has resulted in some markets becoming crowded with its own stores. In certain rural areas, Dollar General has multiple locations within a few miles of each other, cannibalizing sales.

The closures announced are part of an effort to streamline operations by shutting underperforming stores, reducing overlap, and focusing on strengthening the profitability of existing locations. Dollar General also continues to experiment with store formats like its DG Market and pOpshelf concepts, but the recent pOpshelf closures suggest some formats may not be meeting expectations.

Competition and E-commerce Pressures

While Dollar General traditionally focused on areas with limited retail competition, this is changing. Other discount retailers like Family Dollar, Dollar Tree, and regional grocery chains have expanded, intensifying competition. Meanwhile, e-commerce platforms are becoming more accessible to rural consumers, chipping away at the in-store customer base that once gave Dollar General a competitive edge.

Is Dollar General Struggling?

Despite the decline in net income, Dollar General is not in financial distress. The company continues to grow revenues and remains a major player in the discount retail sector. However, its recent financial performance suggests it is feeling the effects of inflation, rising costs, and shifting consumer habits.

The closures, while relatively small compared to the company’s overall size, signal a more cautious and selective approach to growth. Instead of blanket expansion, Dollar General is now focusing on optimizing its existing store base, improving operations, and investing in customer experience upgrades.

Conclusion

Dollar General operates 20,594 stores as of early 2025 and is still expanding, albeit at a slower pace. The recent wave of store closures is not a sign of collapse but of adjustment. Faced with higher costs and changing market dynamics, the company is refining its strategy. Fewer but stronger and more profitable stores are likely the company’s formula for weathering current headwinds.

In the highly competitive and evolving discount retail market, Dollar General’s next moves will be critical. How it manages costs, enhances store performance, and responds to shifting consumer patterns will determine if it can sustain its position as one of the largest discount chains in America.

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