Dollar General recently revised its annual sales and profit forecast, signaling that their expectations have fallen as they deal with higher costs, shipping issues, and problems as a result of the COVID-19 pandemic. The company expects its fiscal 2021 sales growth to increase by 1% to 1.5%, which is below what many initially thought.
This latest news comes amid the store — and many other retail stores — being forced to raise its prices for a variety of reasons. The cost of shipping has surged because of the many global supply chain problems. Bottlenecks and clogs at ports have hindered businesses for the past few months. As many companies worked overtime to try to build up their stock before the holiday shopping season officially began, they also had to spend a lot more money in order to make this happen. As a result, some companies have also had to raise the prices of goods in their stores.
Dollar General normally tries to sell its products for about $10 or less. However, because goods have risen in price, the store may have to continue to raise the price of goods sold in its stores. Dollar Tree, Dollar General’s main rival, tends to only sell items at $1. However, because of the global supply chain problems and other pandemic issues, Dollar Tree recently announced that it had to raise its price point to $1.25 for almost all items.
While Dollar General has had to revise its annual forecast, the company does have large plans for the future. Dollar General plans on expanding internationally for the first time, intending to open about 10 stores in Mexico by the end of 2022. Meanwhile, the company has also announced about 1,000 new Popshelf stores — stores that are generally aimed at wealthy customers who also enjoy treasure hunting — by the end of 2025.
So, while the company has had to deal with major issues because of the pandemic, it still has many options for the future to help the company as a whole grow. So many businesses have been affected by the COVID-19 pandemic. While at first, many analysts thought that businesses would have low stock and empty shelves for the holiday season, that hasn’t yet happened at the mass scale expected.
For one, many Americans started shopping earlier for the holiday season than expected after hearing this news. Consumers wanted to be sure that they got the items they wanted, so many started shopping as early as October. However, because consumers were so worried about this possibility, many big retailers ensured that they ordered — and shipped — enough products so that their shelves wouldn’t become empty. Walmart and Target are both two examples of retailers who invested more money to ensure that they have a large stock ready for the holiday shopping season.
However, many other smaller businesses haven’t had the money to invest in this way, and so may have a smaller stock than usual because of the global shipping problems affecting many.