Last week, as part of its ongoing efforts to restructure its operations, the Fortune 500 corporation Dollar General Corp. terminated approximately sixty corporate workers at its headquarters in Goodlettsville, Tennessee. This information was confirmed by a spokeswoman for the company to The Tennessean on Thursday.
The cheap retailer and grocery store chain has been facing difficulties for the past year, which has resulted in the layoffs. During the course of 2024, the firm has faced significant stock drops and has lost ground to big-box shops.
“These decisions are never easy, but we believe this restructuring will help to streamline and support our ability to best serve our customers, employees, communities and shareholders,” a Dollar General spokesperson stated.
Despite the fact that Dollar General stated that the layoffs affected a “small percentage” of corporate personnel, the jobs that were affected included three vice president roles, senior managers, mid-level engineers and analysts, and several assistants. On Wednesday, January 8, notices alerting employees who had lost their jobs were sent out to those employees who had been laid off.
At least a few of them had been employed by the company for a decade or more.
“The factors that were considered in determining which positions were eliminated included: whether the job duties of the position could be spread across others positions or functions within the organization, potential costs savings related to the elimination, re-prioritization of business initiatives, and potential disruption to the business operations,” according to the notice.
The severance package offered to laid-off workers included a release agreement that, among other things, gave up the legal right to file claims under the Age Discrimination in Employment Act. The letter states that the affected employees are between the ages of 24 and 71.
According to the figures released on December 5, Dollar General’s sales in the third quarter of fiscal year 2024 were not considerably impacted by consumers’ desire for relief from rising grocery prices. Throughout the year, same-store sales grew by 2.4%, 0.5%, and 1.3% per quarter, respectively.
In the second quarter, operating earnings dropped by 20.6% to $550 million, and in the third quarter, they dropped by another 25.3% to $323.8 million.
Additionally, after Hurricanes Helene and Milton devastated the southeast in the fall, the corporation had to pay $32.7 million in hurricane-related charges.
Nevertheless, same-store sales growth for the quarter equaled and almost above projections, according to Todd Vasos, CEO of Dollar General. In the third quarter, net sales rose 5% to $10.2 billion.
“While we continue to operate in an environment where our core customer is financially constrained, we delivered same-store sales near the top end of our expectations for the quarter,” Vasos stated. “We believe our Back to Basics efforts contributed to these results, as we have continued to improve our execution and the customer experience in our stores.”
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According to Chief Financial Officer Kelly Dilts, the corporation plans a “significant increase in planned real estate projects for 2025.” This entails moving about 45 stores, remodeling about 2,000 stores completely, partially remodeling about 2,250 stores, and opening about 575 new stores in the United States.
“Ultimately, our goal is to further enhance the associate and customer experience in our mature stores, while also driving incremental sales growth,” Dilts told investors in December.
In 2024, Dollar General fell three places to No. 111 on the U.S. Fortune 500 list.
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The stock fell from roughly $125 to $84 per share in August, and by this week, it had fallen to roughly $69 per share.
According to a recent Bank of America report, over the past five years, Dollar General has raised food costs more than any other grocery store in the Nashville area.
According to the analysis, Dollar General food costs in the Nashville area increased by 36% between 2019 and 2024. Over that period, local grocery prices rose by a total of 25%.
