For more than 80 years, Dollar General has been selling discount products for the ordinary guy and gal on a budget. Dollar General services communities from right around the corner and across the country with nearly 18,000 locations. Dollar General’s food, personal care, cleaning, and other every-day products range from high-quality private labels to the most recognized global brands.
Dream of opening a Dollar General of your own? Unfortunately, you can’t. Dollar General is not a franchise opportunity at this time and the stores are all company owned / operated. Bummer!
If you could open a Dollar General, you’d likely need to investment between $250,000 – $600,000 based on the industry. According to financial reports, Dollar General brought in a mind-boggling $33+ billion in sales across all of their stores last year so this would be a good business to evaluate if it was possible to join in the future.
I’ve broke down the startup cost, average revenue and a SWOT analysis of this bargain chain to help you identify if it’s worth an investment. Here’s my break down for this corner store chain’s profitability ratio, prospects, and risks. Take our 8-minute franchise quiz to find out if a discount retailer is right for you.
- Financial Requirements and Fees
- How Much Profit Does A Dollar General Franchisees Make Per Year?
- Dollar General SWOT Analysis
- Is the Dollar General Worth the Cost to Invest?
Financial Requirements and Fees
Even though you can’t buy a Dollar General franchise, it’s important to understand the costs, fees, and detailed financial requirements of retail stores in this industry. Dollar General has numerous competitor concepts that you can invest in so understanding these ball-park startup costs is important.
|Liquid capital||$20,000 or more|
|Total investment||$250,000 to $600,000|
|Franchise fee||$20,000 to $50,000|
|Royalty Fee||3% (Dollar Discount Store of America)|
While you can’t open a Dollar General, there are three alternative dollar concept stores that you could open. Since Dollar General stores are controlled by the company, you may never be able to acquire a franchise unless they change their strategy. However, this does not rule out the possibility of leasing a store.
You could contact them on their webpage and have a conversation with them if you want to. Varied shop models have different prices at Dollar General Franchise stores. The sorts of stores they operate, as well as the exact Dollar General Franchise fee, are shown as follows.
- Liberty Dollar Store – In terms of pricing and maintenance, this store, which is part of the Dollar General Stores chain, is the simplest and cheapest to manage. They are self-contained and require little oversight from their parent corporation. A Liberty Dollar Store can be started for as little as $25,000. This may vary based on your loading preferences as well as the place where you plan to set it up.
- Dollar Discount Store Of America – It may only take a $75,000 upfront outlay limited to a maximum of $150,000 for a lower-priced business. It’s not the least expensive type of retailer, but it’s significantly less expensive than Just-A-Buck. To be approved into the franchise, you must provide collateral and have excellent credit. The lower cost will show up in the volume and quality of your first and ongoing inventory.
- Just-A-Buck – The far more complex and costly Dollar General store variety, this one will take an initial outlay of at least $150,000 to $300,000 to get it up and running. All this doesn’t even include the $50,000 franchise fee. One of the requirements for launching this type of business is a 10-year commitment to the franchise, regardless of whether or not it generates the sales you desire.
As you can see the dollar store concept is alive and well. The reality is there will always be a customer base looking for fair deals on the necessities of life.
How Much Profit Does A Dollar General Franchisees Make Per Year?
Company revenue/sales per year
Despite the global challenges, Dollar General’s annual revenue for the fiscal year 2021 was $33.747 billion, up 21.59 percent from the previous year. The sum of money received by a corporation from its consumers in compensation for the goods sold or services is referred to as revenue. To arrive at net revenue, all expenditures and expenditures must be removed from revenue on an income statement.
Related Reading: Is the Cost to Open a Steak ‘n Shake Worth the $10k Investment?
Dollar General’s year-on-year sales have been growing steadily in the past five years. From 2017, it had an average of 11.44% year-on-year growth with the highest jump recorded from 2020 to 2021 with a 21.59% jump. Perhaps the occurrence was brought about by panic buying for supplies when the pandemic hit last 2020. Either way, sales continue to be strong coming out of the health crisis.
Number of units
Dollar General is the largest retailer in the United States in terms of store count with over 18,000 locations across 46 states. A reported 75% of the population of the United States lives within five miles of a Dollar General shop.
Dollar General aims to open 1,110 stores in 2022 and also plans to expand globally. The planned development includes putting up to 10 stores in Mexico. This should result in even higher revenues at the end of the year.
Average Gross Revenue Per Store
$33.74 billion (System-wide sales) ÷ 18,000 units = $1.874 million.
Industry Average Profit Margin
Revenue climbed 7.23 percent faster than Gross Profit increased 3.17 percent, resulting in a decrease in Gross Margin to 18.68 percent, which was below the industry average. In the fourth quarter of 2021, the gross margin declined to 19.25 percent on a trailing twelve-month basis.
Projected Annual Profit Per Store:
The median industry profit margin is relatively modest considering other data suggesting Dollar General averaging above 30% in the past five years of operations. The industry’s sudden drop can be attributed to the ongoing pandemic, inflation, and supply chain issues that have plagued so many other companies.
Comparing pricing and purchasing from across the globe is fairly easy than before thanks to the Internet. Retailers have al