- Dollar General's business model.

 It's a retailer thatcan make a lot of money selling very cheap goods to a relatively small number of people.

 - [Narrator] If you've evershopped at a Dollar General, you might've found the storeon a remote road like this one.

 - [Sharon] It has every appearance of being in the middle of nowhere, but this is a meticulously planned, very well thought through strategy.

 - [Narrator] A strategy that's been key to Dollar General'ssuccess in rural America.

 The company is buckingcurrent retail trends by expanding rapidly and opening stores away from population centers.

 - Dollar Generals gowhere Walmart's aren't.

 - [Narrator] But it's notjust the strategic locations far away from big box stores.

 Dollar General employs a number of tactics to keep operating costs down.

 Including leasing stores,paying employees low wages, and selling limited products.

 And yes, that includes stuffthat isn't really a dollar.

 - Dollar General is almostsomething unto itself.

 It kind of takes pieces from a lot of different retailing models.

 - [Narrator] This is theeconomics of Dollar General.

 After more than 30 consecutiveyears of sales growth, Dollar General has becomeone of the most profitable and fastest growing retailers in the US.

 Last year, the company brought in more than $30 billion in sales.

 So how has a store that sellsproducts at rock bottom prices manage such extreme growth? - They add about two anda half stores every day in the United States.

 Just for scope, there'smore than four times as many Dollar Generalsas there are Walmarts.

 There's more Dollar Generalsthan there are McDonald's in the United States.

 - [Narrator] There are currently more than $17,000 DollarGenerals in the US.

 But if you don't live in rural America, you might not have ever even stepped foot inside the store.

 - [Sharon] Where would youtypically find a Dollar General? You'd think of a two lane road.

 Think of, you know, placeswhere the houses are far apart, farmlands, kind of lowerincome communities.

 You might find them by apost office, or a church, or at an important intersection.

 - [Narrator] This is oftena deliberate decision.

 The company has formulasfor identifying locations to open stores.

 Often, the Dollar Generalwill be down the road miles away from thenearest town and Walmart.

 Areas with limited shopping options.

 Three quarters of Dollar General stores serve communities of 20,000 people or less according to the company.

 - It looks for need, first and foremost.

 So it's gonna look for a place that we might call a fooddesert, where there are not, there's not a grocery store,there's not a big box store.

 It's kind of targetdemographic is households with people making $40,000 or less.

 And it looks for a place where it can get inexpensive real estate.

 - [Narrator] To keep costs down, Dollar General tends tolease their properties rather than buy them.

 And inside the stores, ithas a limited selection of products that it buys in bulk, which gives the company morebuying power with suppliers.

 Most Dollar General storesdon't offer fresh produce.

 And compared to grocery stores, have less perishable items.

 Which have a shorter shelf lifeand bring in lower margins.

 - [Sharon] You walk into a Dollar General, you're gonna see metal shelves.

 It's gonna be quite bare bones.

 Think linoleum, think, you know, think bright lighting.

 You won't see a lot ofpeople working there.

 - [Narrator] By payinglow wages to a minimal, often part-time staff, thecompany keeps labor costs low.

 The median annual income for employees is just over $16,000according to Dollar General.

 Dollar General says they employ more than 157,000 individuals, and that they offer employees competitive wages and benefits.

 - These stores arestaffed at minimum levels, so there aren't many employees.

 They pay closer to a gas station attendant than even a Walmart employee.

 So it's people that muchlike their customer base, people who live in anarea where there aren't a ton of other options.

 - [Narrator] Despite the name, not everything costs a dollar.

 But prices are extremely cheapand often significantly lower than grocery and drug stores.

 Critics say Dollar Generalstrategies harm local communities by not providing healthy food options and potentially hurting thelocal small business economy.

 Dollar General says thatthey are not a grocery store and that they are serving customers that would otherwise not have access to an affordable retail option.

 Ultimately, the lowprices and the convenience for rural customers is whatkeeps people coming back.

 Some shoppers have even founditems for under a dollar.

 - [Shopper] Penny shoppingat Dollar General.

 Let's go.

 The first store I foundPropel water for 1 cent.

 Now let's just use the Dollar General app, scan and verify it's a pennybefore heading to the register.

 - [Narrator] Dollar General ison pace to continue growing.

 The company grew 16% during the pandemic.

 A time where other retailerssaw growth in e-commerce, not in-person shopping.

 - Dollar General plans to open about a thousand stores this year, and when you have a business model that involves small footprint stores without a lot of embellishmentsor bells and whistles, a company can do that quicklyand they can do it cheaply.

 - [Narrator] Dollar Generalis also branching out and going in new directions.

 It's been experimenting with stocking more fresh and refrigerated food, and moving towards urban centers.

 It plans to expand Pop Shelf.

 A new chain aimed at higherincome, suburban customers.

 - Pop Shelf, in addition to being located in different places,it'll aim to sell things that are more, think of more fun.

 So not as much staples thatyou need to get by day to day, but things likedecorations, party supplies, a little bit more fun than necessary.

 - [Narrator] Dollar Generalsays the new expansion isn't necessarily a shift from their overall growth strategy.

 They say they can servea diverse customer base with stores in urban, rural,and suburban locations.

 Yet, even as Dollar Generalexpands its offerings and target demographics, the company expectsthat its core customers will continue to beshoppers in small towns without other options.

 (fun quirky music)