Dollar General Buys 41 Walmart Express Stores

By Sarah Nassauer 

After abandoning a small-store strategy to compete with dollar and convenience stores, Wal-Mart Stores Inc. has sold off a raft of its failed locations to Dollar General Corp.

Dollar General said Wednesday it bought 41 of the former Walmart Express stores in almost a dozen states. The retailer plans to relocate many existing stores to the slightly larger locations, adding fresh produce and meat to shelves, the company said in a news release. Dollar General spokeswoman Mary Winn Pilkington declined to provide details of the transaction.

Wal-Mart launched its Walmart Express small-format stores in 2011 to compete with the rising popularity of dollar stores and to combat slowing growth from its cavernous Supercenters. But in January Wal-Mart closed all 102 Walmart Express locations as part of a rare retreat in the U.S. market.

At the time, Wal-Mart Chief Executive Doug McMillon said the closures were "necessary to keep the company strong and positioned for the future, " allowing employees to focus on growing Supercenters, Neighborhood Markets and online sales. A spokesman for Wal-Mart declined to comment on the Dollar General sale.

By October, Dollar General plans to open the new locations and add them to a growing list of slightly larger stores that stock some perishable food, dubbed internally "Dollar General Plus," said Ms. Pilkington. Currently about 120 of its stores carry fresh produce, she said.

Small dollar stores like Dollar General are usually located closer to residential areas than the typical Wal-Mart and sell everyday staples in smaller sizes to hit lower prices. It is a concept that has resonated with shoppers since the recession, allowing the two largest dollar chains to add thousands of stores.

Dollar General plans to grow from 13,000 locations to 20,000 U.S. stores by 2020 and wants to add more perishable food, health and beauty care items to aisles, executives have said in recent months. Those items tend to bring consumers into stores more often, an important driver of sales at a time when more shopping is shifting online.

Write to Sarah Nassauer at [e-mail]

(END) Dow Jones Newswires

July 27, 2016 18:53 ET (22:53 GMT)

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