A customer walks into a Dollar General Corp. store on Wednesday, September 10, 2014. in Colona, Illinois, USA.
Daniel Acker | Bloomberg | Getty Images
Dollar general said on Wednesday that it has hired its first chief medical officer and will be putting products such as cold and cough medicines and dentures on shelves to become a health care destination.
CEO Todd Vasos said the company’s new foray was inspired by customers who said they wanted more convenient and affordable health products and services.
“Our goal is to build and improve affordable health services for our customers, especially in the rural communities we serve,” he said in a press release.
The fast-growing discounter has more than 17,400 stores across the country, including many in rural areas that don’t have many other grocery stores or large pharmacies nearby. However, it has been criticized by some lawmakers for selling few healthy foods such as fresh fruits and vegetables, crowding out other retailers who would otherwise open up in the areas and sell a wider variety of foods.
In recent years, Dollar General has expanded more of its business to include fresh produce and meat. It has fresh produce in more than 1,300 stores – or about 7% of its total stores. It has announced that the range can be expanded to up to 10,000 stores.
It has also tried new avenues of medical care. Free Covid-19 tests were offered at selected locations last month partnered with the Virginia Department of Health. The Centers for Disease Control and Prevention said it was in talks with the company about converting stores into Covid vaccine sites, although the CDC and the Dollar General have not yet announced any official plans.
Dollar General’s new and remodeled locations will also create space for more aisles of health products and cool boxes for groceries. The company said in the spring that it will build bigger businesses, as more than 1,000 new locations will be opened this year.
On Wednesday the retailer said it had Dr. Albert Wu hired as Chief Medical Officer. He previously worked for McKinsey & Company, where he led a team focused on health-related projects such as caring for thousands of rural patients, modeling pandemic relief support and developing digitally driven health insurance.
According to the press release, Wu joined Dollar General on Monday. Dollar General said it will focus on building relationships with companies that offer health products and services so the retailer can launch their own offerings.
In a research note, Jefferies analyst Corey Tarlowe said the expansion into healthcare will help the retailer gain market share and increase profitability as customers visit stores more regularly and toss additional items into shopping carts. In particular, drug stores are a place where Dollar General steals market share, he said. Dollar General’s prices are typically 40% cheaper than drug stores, 20% cheaper than grocery stores, and in line with bulk retailers, according to the company’s research.
With the effort, he said, “Dollar General continues to cement the company’s moat” as a leader among value and discount retailers.