Dollar General Improves Margins with Products Made Overseas

Goodlettsville-based Dollar General reported record sales in the company’s first quarter Tuesday. The discount retailer is making more money, in part, because it’s getting more of its goods from overseas.

Dollar General profits were up more than 60%, even compared to a strong first quarter last year. Chairman and CEO Rick Dreiling says the company is cutting costs and increasing profit margins by purchasing cheaper products from China, India and elsewhere.

“There’s a focus on where we’re buying product. There’s a focus of how we’re sourcing product. I think there’s just a major change, particularly in Dollar General, in how we look at procuring product.”

Dollar General CFO David Tehle says there’s room to start getting many more products off shore.

“Right now, still a relatively small percentage of our business is foreign source. So just going to that foreign sourcing helps our margin verses a domestic source.”

Margins weren’t the only reason for Dollar General’s record first quarter. Same-store sales also increased by nearly 7%.

The company now has nearly 9,000 stores in 30 states and plans to open 600 new stores this year and remodel or relocate 500 more.

Dollar General did lose two stores to last month’s flooding. Another five were closed temporarily.