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Amazon‘s fast grocery delivery has competition from a very different kind of retailer: Dollar General.
About 75% of delivery orders at Dollar General are delivered within one hour, CEO Todd Vasos said on an earnings call Thursday.
Dollar General has worked with DoorDash on same-day delivery since 2021 and said earlier this month that it would also partner with Uber Eats to expand delivery.
Customers are buying fresh groceries, such as produce and dairy products, as well as frozen foods, through Dollar General’s fast delivery options, Vasos said. Grocery delivery is a key way the dollar store chain is looking to challenge Amazon and Walmart.
Dollar General has traditionally attracted shoppers who are looking for low prices or are on limited budgets. Now, many are looking to the chain for quick deliveries, Vasos added.
“We believe that it’s a powerful combination that we will continue to cultivate in the years to come,” he said.
Shoppers have no shortage of options for getting groceries delivered fast these days. Earlier this month, Amazon said it had expanded its same-day perishable grocery delivery services to 1,000 cities and towns in the US. It plans to double that footprint by the end of 2025, the company said.
At Walmart, about a third of orders that workers pick in stores make it to a customer’s home within three hours, CFO John David Rainey said earlier this month.
Dollar General has about 21,000 stores, and Vasos said that the chain plans to offer delivery at 16,000 of them by year’s end. Previously, the company had planned to offer delivery at 10,000 stores by that time.
While many US city dwellers have long had access to fast grocery delivery options, Dollar General’s delivery options are bringing a similar service to a part of the country “where it is hard to reach many, many customers,” Vasos said.
Crucially, Vasos said, many customers are ordering “larger baskets” with values of over $20 through Dollar General’s Uber Eats partnership. That’s a sign that delivery customers are getting part of their weekly grocery hauls — not an item or two — through delivery, he said. Grocers often make more money when shoppers buy a wider range of goods at their stores.
The Uber offering also appears to be attracting new customers to Dollar General, Vasos said. Bringing in new shoppers, including higher-income ones, has helped Dollar General grow sales in recent quarters.
“We feel that a lot of it is incremental to our base,” Vasos said of the latest delivery option.
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