DOLLAR GENERAL

'Dollar General' (formerly: ) is a chain of variety stores operating in 30 U.S. states. The chain operates about 8,260 stores (as of 2007), and its headquarters is located in Goodlettsville, Tennessee, a suburb of Nashville. As of March 12, 2007, the company is in the process of being acquired by Kohlberg Kravis Roberts, a private equity firm, who intends to take the company back to privately-owned status.^[1]
The stores were founded in 1955 by Cal Turner in Scottsville, Kentucky. Turner was illiterate and later created a Literacy Fund which helps people learn to read; the fund donates computers and books to local schools and libraries.
Dollar General stores are typically in small shopping plazas or strip malls in local neighborhoods. The company acquired the 280 stores of the P.N. Hirsh Division of Interco, Inc. (now Furniture Brands International, Inc.) in 1983 and in 1985 added 206 stores and a warehouse from Eagle Family Discount Stores, also from Interco, Inc. In recent years, the chain has started constructing more stand-alone stores, typically in areas not served by another general-merchandise retailer. In some cases, stores are within a few city blocks of each other.
Dollar General offers both first-quality and lesser-quality merchandise — including off-brand goods and closeouts of name-brand items — in the same store, often on the same shelf.
Although it has the word "dollar" in the name, Dollar General is ''not'' a dollar store in the strict sense of the phrase, because it has goods that are priced at more (or less) than a dollar. However, goods are usually sold at set price points of 10¢, 25¢, 33¢, 50¢, $1, $1.50, $2.00, $2.50, $3.00, $4.00, $5.00, $6.00, $8.00, $10, $12, $15, and $20.
Dollar General typically serves communities that are too small to attract a Wal-Mart. It competes in the dollar store format with national chains Family Dollar and Dollar Tree, regional chains such as Fred's in the southeast, and numerous independently owned stores. More recently, its move toward multiple stores in suburban areas is an effort to give customers the low prices they might find at Wal-Mart or K-Mart, but without the hassle of shopping in supercenters. Indeed, some of its newer stores are within sight of Wal-Mart Supercenter locations.

Contents

Concepts

Acquisition

Other Facts

References

External links

Concepts

Since the turn of the century, Dollar General has experimented with stores that carry a greater selection of grocery items. These stores (similar to the Wal-Mart Supercenter, but much smaller) operate under the name "Dollar General Market". These stores are similar to Aldi and Save-A-Lot in that they are "no-frills" supermarkets - supermarkets that don't offer special services such as a pharmacy or a video store, and offer a selection of groceries.
When the first Dollar General store opened in Scottsville, Kentucky, on June 1, 1955, the concept was simple – no item in the store would cost more than one dollar. The idea became a huge success, and other stores owned by J.L. Turner and his son Cal Turner were quickly converted. By 1957, annual sales of Dollar General’s 29 stores were $5 million.
The Turners did not reach this level of success without obstacles. James Luther (J.L.) Turner’s father died in an accident in 1902 when J.L. was only 11. J.L. had to quit school so he could work the family farm and help provide for his mother and siblings. He never completed his education. J.L. knew his limited education demanded that he become a quick study of the world around him.
After two unsuccessful attempts at retailing, J.L. became a traveling dry goods salesman for a Nashville wholesale grocer. J.L. left the sales job after 10 years and settled his family in Scottsville, Kentucky. During the Depression, he began buying and liquidating bankrupt general stores. J.L.’s only child, Cal Turner, Sr., accompanied his father to these closeouts at a young age, gaining valuable business knowledge and skills.
In October 1939, J.L. and Cal opened J.L. Turner and Son Wholesale with an initial investment of $5,000 each. Wholesaling quickly gave way to retailing – J.L.’s third and final attempt at retailing. The switch to retailing resulted in annual sales above $2 million by the early 1950s and the rest is history.
J.L. died in 1964. Four years later, the company he co-founded went public as Dollar General Corporation, posting annual sales of more than $40 million and net income in excess of $1.5 million. In 1977, Cal Turner, Jr., who joined the company in 1965 as the third generation Turner, succeeded his father as president of Dollar General. Cal Jr. led the company until his retirement in 2002. Under his leadership, the company grew to more than 6,000 stores and $6 billion in sales.

Acquisition

Dollar General is no longer a publicly traded company. On July 6, 2007, all shares of Dollar General stock were acquired by private equity investors for $22.00 per share. An investment group consisting of affiliates of Kohlberg Kravis Roberts & Co. L.P. (KKR), GS Capital Partners (an affiliate of Goldman Sachs), Citi Private Equity and other co-investors completed an acquisition of Dollar General Corporation for a total enterprise value of $7.3 billion. ^[2]
As a part of the transition to a privately held company, Dollar General is assessing each location as leases run out against a model known as "EZ Stores". This assessment includes evaluating whether the location has a loading dock, garbage dumpsters, adequate parking, and acceptable profitability. Stores that do not pass this evaluation are closed.^[3]

Other Facts

★ Unlike most businesses, Dollar General does not accept major credit cards, with the exception being Discover and Visa (as of 9/20/06). Dollar General also accepts debit cards (through Visa or MasterCard) and food stamp (EBT) cards.

★ The KKR deal will be complete 3Q 2007.

References

1. Dollar General being acquired for .87B by equity firm
2. http://www.shareholder.com/dollar/index.cfm
3. Location part of store closing Susan Elzey

External links

★ Dollar General Website