Dollar General Is Shuttering 100 Stores—but There's A Catch

In March 2025, Dollar General released its financial guidance for fiscal 2025. Among the glowing news of $10.3 billion in fourth-quarter net sales was also a dour decrease of 49.2% in operating profit. The company also announced the planned closure of 96 Dollar General stores and 45 pOpshelf stores. Considering the number of beloved retail chains that have filed for bankruptcy, it would be fair to perceive any rapid closures of stores in the face of so much past success as ominous news. However, the reason for these closures aren't necessarily the telltale sign of coming bankruptcy you might think they are. The clue to this is revealed in Dollar General's communications to investors.

It wasn't that long ago that Dollar General stores were all the rage. Back in 2022, Forbes noted that the chain had sneakily overtaken the biggest retail chains in the U.S., launching three stores a day to eventually build out over 18,000 locations in places they shouldn't have worked. Backed by data analyzing everything from population density and traffic in small towns, to the location of local landmarks that attract foot traffic like churches and schools, Dollar General's use of technology to map out old-school brick and mortar appeared to be a blueprint for other retailers. At the time, the strategy was so successful that the company was planning to expand with another 17,000 storefronts. 

While it's true that many of the popular companies worried about tariffs in 2025 are retailers like Target — a major retailer that has issued warnings about the impact of tariffs on its business — that isn't actually an area of main concern for Dollar General. It turns out that only 10% of the chain's products are affected by tariffs on China, which actually works in its favor when compared to other competitors like Walmart or Target. The real reason Dollar General is shuttering stores has to do with strategy.

Toward the end of the fourth fiscal quarter of 2024, Dollar General underwent an optimization review of its stores, looking at factors like the current performance of individual stores and the future outlook for those brick and mortar locations. These assessments would cost Dollar General $232 million in closures and impairments, but with a forward looking strategy the company hopes will lead to more profit. A statement in the Dollar General report by the company's CEO makes the case that these closures represent "less than one percent" of all the company's stores, and "better positions" the company to serve consumers. In other words, the closures are more representative of progressive business acumen than doom and gloom. 

As mentioned in the Dollar General 2024 fourth-quarter fiscal report, even as the company shutters close to 100 stores, it has 4,885 real estate projects in 2025, including the launch of 575 new brick and mortar outlets in the U.S., 15 new stores in Mexico, and the remodeling of 4,250 stores. It also appears that a strategic decision has been made to relocate 45 stores to more advantageous locations, with a goal of growing net sales by 3.5% to 4.4% in 2025. Dollar General's move is similar to why Walmart decided to close stores in 2025, but with greater potential for growth. With annual cash from operations growing by 25.3% in the fourth quarter of 2024 to $3.0 Billion, and net income of $191.2 million for the fourth quarter of 2024, it doesn't feel like it's time to sound the alarm over the closure of a few dozen stores. Especially considering the almost 18,000 other store locations and plan to build out a few hundred more.