Dollar General's Remodel Push Drives Sales: Room for More Growth Ahead

Dollar General Corporation’s DG investment in its existing store fleet is proving to be a key driver of top-line performance. During the second quarter of fiscal 2025, the company completed a significant number of remodel projects, enhancing its mature store base. The retailer executed 729 Project Elevate remodels and 592 Project Renovate remodels during the quarter, targeting 80% of the floor space. 

The initiatives focus on merchandising optimization, improved product adjacencies, and expanded category refreshes to drive both traffic and basket size. Management expects remodeled stores to deliver first-year annualized comp sales lifts between 6% and 8% for Project Renovate and 3% to 5% for Project Elevate. Initial results show higher customer satisfaction and improved traffic trends, suggesting the projects are gaining traction quickly.

For fiscal 2025, Dollar General plans roughly 4,885 total real estate projects, including 2,250 Project Elevate and 2,000 Project Renovate remodels, alongside new store openings and relocations. With second-quarter same-store sales up 2.8%, attributed to a 1.5% jump in customer traffic and a 1.2% increase in the average transaction amount, management believes the remodel pipeline will provide a meaningful boost to future comps performance.

Even if macroeconomic pressures temper consumer spending, the remodel program’s operational and merchandising upgrades provide a structural lever for incremental sales growth. With more remodels to come, Dollar General appears positioned to capture meaningful comp sales benefits. 

Dollar General now expects net sales growth of 4.3% to 4.8%, up from its prior outlook of 3.7% to 4.7%. Same-store sales are projected to increase 2.1% to 2.6%, up from the earlier range of 1.5%-2.5%.

How Walmart & Target Fare Against Dollar General?

Walmart Inc. WMT continues to post steady traffic gains, with U.S. comparable sales up 4.6% in the second quarter of fiscal 2026, driven by strength in grocery, health & wellness, and improving general merchandise trends. Walmart’s U.S. e-commerce sales climbed 26%, fueled by nearly 50% growth in store-fulfilled delivery, where about one-third of orders were completed within three hours. Reflecting demand resilience, Walmart raised its full-year sales outlook to 3.75%-4.75%, up from its prior projection of 3%-4%. 

Target Corporation TGT showed early signs of recovery after sluggish first-quarter fiscal 2025 results. While Target’s second-quarter sales fell 0.9% year over year, traffic trends improved meaningfully, especially in stores. Target registered an increase of 4.3% in comparable digital sales, fueled by robust same-day delivery and growth in Drive Up, but a 3.2% decline in comparable store sales. Target continues to expect a low-single-digit decrease in sales for fiscal 2025. 

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