In the world of retail, two giants often come to mind: Dollar General and Walmart. With their ubiquitous presence and low prices, it‘s easy to wonder if there‘s a connection between the two. Many shoppers have asked the question, "Is Dollar General owned by Walmart?" In this article, we‘ll dive deep into the history and ownership of both companies to uncover the truth behind this common query.
The Origin Story of Dollar General
To understand Dollar General‘s ownership, let‘s start with its humble beginnings. The company was founded in 1939 by James Luther Turner and his son, Cal Turner, in Scottsville, Kentucky. Originally named J.L. Turner and Son, the store focused on selling quality products at low prices, a strategy that would become the foundation of Dollar General‘s success.
Over the years, the company expanded rapidly, and by 1968, it had reached $40 million in sales with 418 stores across the United States. The company officially changed its name to Dollar General Corporation in 1968, cementing its position as a leading discount retailer.
Dollar General‘s Growth and Expansion
Dollar General‘s success can be attributed to several key strategies, including:
- Focusing on underserved rural and suburban markets
- Offering a limited selection of essential items at low prices
- Maintaining a low-cost operating model with minimal overhead expenses
- Continually expanding its store footprint across the United States
As a result of these strategies, Dollar General has experienced remarkable growth over the past few decades. According to the company‘s 2020 annual report, Dollar General operated 17,177 stores in 46 states as of February 26, 2021, with net sales of $33.7 billion in fiscal year 2020.
| Fiscal Year | Net Sales (in billions) | Number of Stores |
|---|---|---|
| 2018 | $25.6 | 15,370 |
| 2019 | $27.8 | 16,278 |
| 2020 | $33.7 | 17,177 |
Source: Dollar General 2020 Annual Report
Dollar General‘s Ownership Journey
While Dollar General has grown significantly since its founding, its ownership has undergone several changes. In 2007, the company was acquired by private equity investors, including Kohlberg Kravis Roberts (KKR), GS Capital Partners, and Citigroup Private Equity, in a deal valued at $6.9 billion.
However, this was not the end of Dollar General‘s ownership journey. In 2009, the company once again became a publicly-traded entity, with shares listed on the New York Stock Exchange under the ticker symbol "DG." Today, Dollar General is owned by a combination of private equity investors and public shareholders.
The Role of Private Equity in Dollar General‘s Success
The private equity firms that acquired Dollar General in 2007 played a significant role in the company‘s growth and success. These firms, known for their strategic investments and operational expertise, helped Dollar General streamline its operations, expand its store footprint, and improve its financial performance.
According to Mike Calbert, former head of KKR‘s retail investment team, "Dollar General was a great investment for KKR, and we are proud of the company‘s success. During our ownership, we worked closely with management to accelerate new store openings, improve the merchandising strategy, and enhance operational efficiency."
Walmart‘s Acquisition History
Walmart, founded by Sam Walton in 1962, has grown to become the world‘s largest retailer. Throughout its history, Walmart has acquired several companies to expand its reach and offerings. Some notable acquisitions include:
- Asda (UK): In 1999, Walmart acquired the British supermarket chain Asda for $10.8 billion, marking its entry into the UK market.
- Seiyu (Japan): Walmart purchased a controlling stake in the Japanese retailer Seiyu in 2002, and by 2008, it had acquired 100% of the company.
- Jet.com (US): In 2016, Walmart acquired the e-commerce startup Jet.com for $3.3 billion to bolster its online presence and compete with Amazon.
Despite these acquisitions, Walmart does not own Dollar General. The two companies operate independently and are competitors in the discount retail sector.
Dollar General‘s Own Acquisitions and Brand Expansion
While Dollar General has not made major acquisitions like Walmart, it has strategically purchased stores to expand its footprint. In 2016, Dollar General acquired 41 former Walmart Express locations, which it converted into Dollar General stores. This move allowed Dollar General to enter new markets and strengthen its presence in existing ones.
Additionally, Dollar General has launched its own brand called PopShelf, which targets a higher-income customer base by offering a curated selection of home décor, beauty products, and other trendy items at affordable prices. PopShelf stores are designed to provide a unique shopping experience that sets them apart from traditional Dollar General locations.
As explained by Emily Taylor, Dollar General‘s executive vice president and chief merchandising officer, "We are excited to introduce PopShelf from a position of strength, further highlighting our innovative spirit and building on our proven track record of store format innovation."
The Walton Family‘s Ownership of Walmart
Walmart‘s ownership is closely tied to the Walton family, descendants of founder Sam Walton. The family owns more than 50% of Walmart‘s total shares through their holding companies, Walton Enterprises LLC and the Walton Family Holdings Trust.
This majority ownership allows the Walton family to maintain significant control over Walmart‘s strategic direction and decision-making processes. However, it‘s important to note that Walmart is a publicly-traded company, and the remaining shares are owned by institutional and individual investors.
Dollar General and Walmart: Competitors, Not Affiliates
While both Dollar General and Walmart operate in the discount retail space, they cater to slightly different target audiences and have distinct business models. Dollar General primarily focuses on smaller format stores in rural and suburban areas, offering a limited selection of essential items at low prices. In contrast, Walmart operates larger format stores, often in more urban areas, with a wider variety of products, including groceries, electronics, and home goods.
Despite their differences, Dollar General and Walmart remain fierce competitors, constantly vying for market share and customer loyalty. However, there is no ownership connection between the two companies.
The Impact of Competition on Consumers
The competition between Dollar General and Walmart, along with other discount retailers, has significant implications for shoppers. As these companies battle for market share, consumers benefit from lower prices, improved product selections, and more convenient shopping experiences.
As retail expert and consultant Sarah Thompson notes, "The intense competition in the discount retail sector keeps prices low and forces retailers to continuously innovate and improve their offerings. This ultimately benefits consumers, who have more choices and can find the best value for their money."
The Future of Dollar General and Walmart
Looking ahead, both Dollar General and Walmart face challenges and opportunities in the rapidly evolving retail landscape. E-commerce, changing consumer preferences, and economic uncertainties are just a few of the factors that will shape the future of these companies.
For Dollar General, continued expansion into new markets, further development of the PopShelf brand, and investments in e-commerce capabilities will be critical to maintaining growth and competitiveness. As CEO Todd Vasos stated in the company‘s 2020 annual report, "We believe our unique combination of value and convenience positions us well for continued success in the years ahead."
Walmart, on the other hand, will likely focus on strengthening its omnichannel presence, leveraging its vast store network to offer seamless online and in-store shopping experiences. The company‘s recent investments in e-commerce, including the acquisition of Jet.com and the expansion of its grocery pickup and delivery services, demonstrate its commitment to adapting to changing consumer preferences.
Retail industry analyst Michael Baker of D.A. Davidson & Co. suggests, "Walmart‘s size and scale give it a significant advantage in the evolving retail landscape. However, the company will need to continue innovating and investing in its e-commerce capabilities to remain competitive with Amazon and other online retailers."
Conclusion: Dollar General‘s Independence
To answer the question once and for all: no, Dollar General is not owned by Walmart. While both companies have grown to become major players in the retail industry, they have distinct ownership structures and operate independently.
Dollar General‘s journey from a family-owned business to a publicly-traded company with private equity investors has shaped its growth and success over the years. Meanwhile, Walmart‘s acquisitions and the Walton family‘s majority ownership have contributed to its position as the world‘s largest retailer.
As a savvy shopper, understanding the ownership and business models of your favorite retail stores can help you make informed decisions about where to shop and what to expect in terms of product selection, prices, and shopping experience. With this knowledge, you can navigate the retail landscape with confidence, whether you‘re shopping at Dollar General, Walmart, or any other store.
In the end, the competition between these retail giants benefits consumers by driving innovation, keeping prices low, and providing a wide range of shopping options. As the retail industry continues to evolve, it will be fascinating to watch how Dollar General, Walmart, and other key players adapt and grow in the years to come.
