Dollar General is bringing its latest concept, called Popshelf, to Texas.
After covering mostly rural Texas with more than 1,625 Dollar General stores since the 1970s, the Tennessee-based retailer says this concept was created to target high-income households in the suburbs of big cities.
The first Popshelf in Texas will open this spring in McKinney’s Eldorado Plaza mall, in a space that once housed a Pier 1 Imports. Another has been announced in the Thousand Oaks area of San Antonio, and more Texas Popshelf stores are in the works, according to the retailer.
Most items are $5 or less in categories that include seasonal items, housewares and home decor, health and beauty products, home cleaning products, paper products, and party supplies . The stores also sell toys, snacks and electronics.
Popshelf stores are approximately 9,000 square feet, slightly larger than the average Dollar General. About 50 are open to date in the Southeast.
Texas is likely to get a few, based on Dollar General’s footprint in the state. Its store count in Texas is 40% higher than its next largest states, Georgia and Florida.
Popshelf’s price target of $5 or less puts it squarely in the market to compete with the fast-growing FiveBelow. Dollar General plans to develop Popshelf even faster than its competitor.
Dollar General plans to open 100 Popshelf stores this year and reach 1,000 stores in the United States by the end of 2025, the company said. FiveBelow was founded in 2002 and has just opened over 1,100 stores.
Among dollar stores, Dollar General has been the most financially successful, increasing same-store sales for 30 consecutive years. It is the largest US retailer by number of stores with 18,000 and the company told analysts in December it would open its first stores outside the US. Ten stores are planned in Mexico this year.
Dollar General opened its first two Popshelf stores at the end of 2020, which was not just the first year of the pandemic, but a record year for store closures and retailer bankruptcies. It went ahead with its plans anyway, and the company told analysts in December that Popshelf is “far exceeding our expectations” with annual sales of $1.7 million to $2 million per store.
Popshelf is recruiting. Each store will have a staff of 15 people.
Creating a new concept is often a defensive move for retailers. It’s a tough decision to divert resources and create a channel that can cannibalize what it already has.
Other notable concepts created by retailers: Gap created Old Navy in the 1990s and has since added other brands. J. Crew created Madewell in the 2000s. HEB created Central Market in the 1990s.
Usually the old and new strings work in tandem, but not always. The Dayton regional department store company no longer exists, but it had the foresight in 1962 to create Target for discount shoppers.