Meet Popshelf, Dollar General’s Bid for Affluent Shoppers

Dollar General wants to do what even Netflix couldn’t: Make a spinoff that’s better than the original. Meet Popshelf, a concept from a dollar store that won’t be branded as a dollar store.

The vibe: Discount Magnolia Home. Popshelf will sell home goods and party supplies catering to suburban women in households making up to $125,000/year. Execs gave “charcuterie trays” a shout-out in early press, so you know it’s fancy.

• For comparison: Dollar General’s average rural customer household makes $40,000/year.

The timing: Dollar General is one of very few retailers that can test drive upmarket concepts in the age of mass store closures. In Q2, the chain reported a 19% comparable sales bump.

But Dollar General will limit Popshelf to 30 locations in the first fiscal year—restraint for a chain with 16,700+ stores.

Stealth on the shelf

Wiping Dollar General’s fingerprints from Popshelf’s branding may sound extreme. But “the key thing with any spinoff is that the new format [...] needs to be its own concept with its own values and positioning,” Neil Saunders, managing director of GlobalData Retail, told me via email.

• Subtext: Affluent shoppers want deals, but they don’t want to shop somewhere that sounds cheap.

Looking ahead…the competition to grab minivan drivers’ loose bills will be fierce.

• Dollar General stores sell groceries and essentials in rural areas where there are few stores; Popshelf’s entering suburban centers with 100% impulse buys.
• Those discretionary items, Saunders said, can already be found at retailers spanning Five Below, Dollar Tree, Walmart, and Target.

One solution? Dollar General execs said Popshelf stores will spread surprise items into stores on a regular basis, mirroring the “treasure hunt” experience TJX pioneered and ideally driving multiple visits.

My takeaway: We’ll know Popshelf is a success if its target customers never find out who’s pulling the strings.