With inflation not letting up and the economy in a volatile state, so many of us are keeping our wallets close and being as budget-conscious as possible. So, you’d think dollar stores would be thriving right now. But at least for Dollar General, that’s not quite the case. The retailer recently revealed a weaker-than-expected 2025 forecast amid slumping sales, just as they announced that they’re closing 141 stores across the U.S. this year.
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Dollar General’s sales have been slumping for the past couple of years.
In a recent report, Reuters explains that Dollar General’s stock has dropped almost 70 percent over the past two years due to competition from Walmart, Temu, and Shein.
Unfortunately, the current economic climate is dealing yet another blow. The retailer says its customers, “who are typically from the lower-income groups earning less than $50,000 annually,” according to Reuters, are struggling to afford even basic necessities.
“What has become apparent as we move into Q1 is trade down is back,” said Dollar General Corporation CEO Todd Vasos in a recent post-earnings report call. “Many of our customers report that they only have enough money for basic essentials with some noting that they have had to sacrifice even on the necessities. We are not anticipating (an) improvement in the macro environment, particularly for our core customer.”
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Dollar General is set to close 141 stores in 2025.
It’s not all bad news, however. Reuters reports that Dollar General’s stock actually rose 4 percent last week after its 2024 Q4 earnings, which included the holiday season, beat expectations. The outlet attributes this to Dollar General’s initiatives to remodel stores, trim inventory, and close underperforming locations. Now, even more stores will close in 2025.
According to a press release, the company announced that it would close 141 stores under its portfolio—96 Dollar General stores and 45 Popshelf stores. (The latter is more similar in inventory and shopping experience to Five Below than a traditional dollar store.) Additionally, six Popshelf locations will be converted to Dollar General stores.
To put this in context, Fast Company shares that there are currently a bit more than 220 Popshelf locations in the U.S.—meaning the closures will reduce their footprint by about 20 percent. Dollar General, on the other hand, has more than 20,000 locations.
“As we look to build on the substantial progress we made on our Back to Basics work in fiscal 2024, we believe this review was appropriate to further strengthen the foundation of our business,” said Vasos. “While the number of closings represents less than one percent of our overall store base, we believe this decision better positions us to serve our customers and communities.”
Dollar General has not released the locations of the stores on the chopping block, but the press release does state that they will close during the “first quarter of the 52-week fiscal year ending January 30, 2026 (‘fiscal 2025’).”
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But they’re also expanding.
Despite recent hurdles, Dollar General is confident that it will pull through. Therefore, they announced in the recent earnings call that they’re also moving ahead with the following expansion plans:
- Opening 575 new stores in the U.S. (and up to 15 in Mexico)
- Fully remodeling approximately 2,000 stores
- Remodeling approximately 2,250 stores
- Relocating approximately 45 stores
