Why There Seems to be so Many Dollar General’s in the Tri-State
If you've driven through the intersection of Highway 66 and Sharon Road in Newburgh at any point over the past few weeks, you've likely noticed the construction of a new building on the southeast corner of the intersection. That construction will eventually become a Dollar General store at some point in the future. You may think that yet another location is unnecessary since it feels like there are more than enough locations already in the Tri-State (the new location just under four miles away from another location on Highway 662 in Newburgh), but for the company it's all part of the plan.
Type in any Evansville zip code and set the radius to 50 miles in the "Find a Store" feature on the Dollar General website, and looks like the area has broken out in some sort of bargain rash, with markers dotting what seems to be every nook and cranny. They are everywhere. From Vincennes to Madisonville, from Norris City, Illinois to Whitesville, Kentucky, and all points in between. There's a location in Chandler. Another in Boonville. Yankeetown has one, and so does Spottsville just east of Henderson. They're just a few of the nearly 15,500 locations across the country.
Why so many? Because that's what their business model calls for, and it works. Really, really well.
Notice some of the town names I listed in the earlier paragraph; Yankeetown, Spottsville. What do they have in common? Like so much of the Tri-State, they are small rural towns where the nearest grocery or department store is a 20-30 minute drive one way. Where stores like Walmart, Target, and other wouldn't bother building a store because there's not enough people living there to turn a profit, Dollar General saw an opportunity. Long story short, they built an empire on serving the areas of the country, and the people who live there, the other stores wouldn't touch.
In an article titled "Making Billions at the Dollar Store" on Forbes.com, journalist Phil Wahba says the following of the strategy:
...it has thrived with a simple playbook: Open small, no-frills stores in towns that bigger retailers shun; offer a narrow product range; and limit staffing, the better to keep prices cheap, cheap, cheap.
Wahba goes on to note the company "typically focused on towns of no more than 20,000 people" as it worked to expand across the country. We certainly have our fair share of those here. But if that was the case, why are there so many in Evansville, Henderson, and Owensboro, arguably the largest cities in our area? To answer that, you need to focus less on the number of locations the chain has in those areas, and more on where those locations are.
The company was founded on the idea of providing cheap goods to people who don't have much money. You'll notice that many (not all) of the chain's stores in the Evansville area are in areas that are typically viewed as lower-income. Areas where residents are struggling to make ends meet and need to get the most for their money. These individuals may also not have their own vehicles, so having a store where they can stretch their dollar that's also within walking distance of their home is a huge benefit to them.
But times have changed. The company now finds more and more people, regardless of income bracket, are looking for ways to save a few bucks when they shop, and many of them are finding those savings at their local Dollar Generals. This of course means more profit for the company leading to more stores (and more stores, and more stores...) not just in lower income areas of cities, but middle, upper-middle, and upper income areas as well.
Many people on social media don't seem thrilled with the amount of stores popping up around the Tri-State, but it looks like the trend isn't slowing down anytime soon. In the aforementioned Forbes.com article, Vasos said the company has plans to open another 975 locations across the company this year alone. That includes, presumably, the newest location in Newburgh which, according to Eyewitness News, as no set opening date.
While you may not be a fan of the number of locations all around the Tri-State, the company truly is the definition of the American dream; find a need no one else is providing a service for and build an empire filling it.