Dive Brief:
- More than 80% of Dollar General's deliveries from stores arrived to customers in one hour or less for the quarter that ended May 1, with about half of those orders delivered in under 30 minutes, CEO Todd Vasos said during a Q1 earnings call last week.
- Dollar General currently offers delivery from about 18,000 stores via the company's in-house MyDG Delivery service and third-party partners DoorDash and Uber Eats, Vasos said. The company has more than 21,000 stores overall.
- "Collectively, these delivery options have significantly enhanced the convenience proposition for our customers with the ability to deliver from stores to their homes within minutes," Vasos said.
Dive Insight:
Dollar General's proximity to customers enables its fast delivery speeds, COO Emily Taylor said on the call, with about 75% of the U.S. population living within five miles of a store location. The retailer's delivery capabilities are driving improved financial results, with consumers buying more products for delivery than they would in the average store transaction, Taylor added.
"And in addition to that, we see that our existing customers use delivery to shop us more often," Taylor said. "And at the same time, new customers are using delivery to find us. So highly incremental for us."
Delivery sales contributed an estimated 70 basis points to same-store sales growth of 2% in Q1, according to Vasos. In the prior quarter, delivery sales provided 80 basis points of its comparable stores sales growth of 4.3%.
The company expects continued growth from its delivery service due to new capabilities like a delivery subscription program, Taylor said. The program, expected to be piloted later this year, "combines benefits at Dollar General with other offers and other benefits for our customers that are specifically targeted and chosen for our customer base," Taylor added.
Dollar General is among several retailers revving up their same-day delivery capabilities to meet consumer demand and drive repeat orders. Walmart has more than doubled its store-fulfilled delivery sales over the past two years and can now reach about 60% of the U.S. population with 30-minutes-or-less delivery. And Amazon continues to expand its fast delivery options, launching one-hour and three-hour offerings earlier this year.
