Dollar General is testing same-day delivery to customers' homes as the deep discounter tries to fend off fiercer competition with Walmart.
On an earnings call Thursday, Dollar General CEO Todd Vasos said the retailer "soft launched" the delivery program in September. Now it offers same-day delivery at about 75 stores, he said. It is offered through a third-party company, which he did not name.
"We've always said here, 'We're going to do delivery our way when it's time,'" Vasos said. "We believe it's time."
He said the company expects it will ultimately expand the offering to "thousands of stores."
With same-day delivery, the Tennessee-based dollar store is acknowledging the pressure from other retailers like Walmart, Amazon and Temu that offer convenience along with low prices. Walmart, for instance, has significantly grown its online business, posting 10 quarters in a row of double-digit e-commerce gains in the U.S., as it offers curbside pickup and speedier home deliveries.
Dollar General typically does not share updates or specific figures about its e-commerce business in quarterly earnings reports because of its heavy reliance on brick-and-mortar sales.
Yet over the past year, Dollar General has felt the pinch from both economic challenges and its own strategy. Consumers, particularly low-income households, have pulled back on discretionary purchases because of high inflation. Dollar General also has paid millions of dollars in fines for sloppy stores and blocked fire exits that became both workplace safety hazards and potential turnoffs for its shoppers.
"The guys in Bentonville [the Arkansas home of Walmart's headquarters] took a little bit larger piece" of the retailer's middle-income customer base," Vasos said at a Goldman Sachs retail conference in September.
Vasos said the company launched its own program after learning from its DoorDash deliveries, which are available at about 16,000 of its stores.
The new offering, DG Delivery, is available for customers at select stores according to Dollar General's website. Customers place orders through Dollar General's app and can get the same store prices and delivery in as little as an hour. The program also accepts digital coupons and offers cash back rewards.
DG Delivery does not appear to charge a fee or have a minimum order requirement according to the website.
"Same-day delivery is an opportunity to grow our advertising business too," Vasos mentioned during Dollar General's earnings call on Thursday since customers would engage with the app more frequently when placing orders.