Dollar General (NYSE: DG) just announced it plans to hire 10,000 new workers in the next month, but unlike mass merchandisers such as Target, which recently said it was hiring 70,000 new temporary employees for the holiday shopping season, the deep discount chain’s new hires will be permanent.
The dollar store chain operates more than 13,000 stores and is looking for both full-time and part-time employees to fill vacancies and support planned store openings. It notes it has created approximately 42,000 new jobs since 2008.
Both Dollar General and rival Dollar Tree surprised the market last month with quarterly numbers that came in well below analyst expectations: The former recorded same-store sales growth of just 0.7% while the latter came in with comps of just 1.2%, compared to the forecast 2.4%. Comparable-store sales are an important retail metric because they strip out the growth associated with simply opening new locations, and are viewed as a better indicator of the organic health of a business.
Deep discount chains have been solid performers ever since the Great Recession was triggered by the collapse of financial markets. But in recent periods, retail king Wal-Mart has made a concerted effort to reclaim the mantle of low-price leader by rolling back prices. As it noted in its May earnings conference call, “Over time, we intend to lower prices further in a deliberate, strategic way to drive our productivity loop.”
That seems to be paying off: Wal-Mart has notched eight consecutive quarters of higher comps growth, seven straight quarters of higher customer traffic, and it posted a 3% rise in sales in the latest period.
Dollar General announced earlier this year it intended to expand its square footage of store space by 6% and 8% this year, which would take its total to almost 100 million square feet.
The deep discounter’s stock is down 22% in the past month and has lost a quarter of its value after hitting a 52-week high in July.