Dollar General is doubling down on SKU rationalisation as a core lever in its turnaround, with leadership crediting leaner assortments and tighter inventory control for improving performance.
CEO Todd Vasos said SKU reduction has been a “cornerstone” of the retailer’s stabilisation, building on earlier momentum where simplifying assortments and prioritising faster-turning products helped lift sales.
CFO Kelly Dilts, referred to on the call alongside executive Emily Taylor, said merchandise inventories totalled $6.3 billion for the quarter, with the company continuing to reduce stock levels while improving availability.
“In-stocks” increased by roughly 250 basis points year over year, reflecting better on-shelf availability even as overall inventory is being tightened.
The company now aims to grow inventory at a slower rate than sales, signalling a more disciplined approach to working capital.
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The inventory gains are being supported by operational changes across the supply chain. Distribution centres are executing more aggressive seasonal sorting to move goods to stores faster, while Dollar General is also leveraging its private truck fleet to improve flow and reduce restocking time.
Fewer SKUs in-store are helping streamline shelf replenishment, supporting both labour efficiency and product availability.
The combined effect is a more responsive inventory model, with faster turns and reduced complexity at store level.
Dollar General’s strategy reflects a broader trend across retail, with several chains cutting back assortments to improve clarity and performance.
Bath & Body Works has been simplifying its product mix following customer feedback that stores felt overcrowded, while Lowe’s has pursued a similar approach, targeting a 15% reduction in SKUs.
The shift highlights a growing focus on productivity over breadth, as retailers look to balance inventory efficiency with customer experience in a more constrained operating environment.
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