Serving the low-income consumer in a rich economy: Dollar General racks up sales

Glyn Atwal and Douglas Bryson
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Glyn Atwal: BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC)
Douglas Bryson: ESC Rennes School of Business - ESC [Rennes] - ESC Rennes School of Business

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Abstract: Purpose The conceptualization of the Base of Pyramid (BOP) proposes that low-income markets can lead to profitable opportunities for businesses. The purpose of this study is to identify key success factors of a BOP business strategy based on a case study of the discount retailer, Dollar General, in the USA. Design/methodology/approach The research design used in this research is an in-depth case study of Dollar General in the USA. Qualitative methods are applied in both the primary and secondary data collection and during the follow-on data analysis of Dollar General. Findings Dollar General's strategic profile is achieved through the combination of the following four actions which are tailored to compete effectively at the BOP in the USA: creating the neighborhood discounter, raising aspirational appeal, reducing service and eliminating internationalization. Research limitations/implications The case is specific to Dollar General in a US cultural context. Practical implications The case of Dollar General demonstrates how a discounter retailer should not only follow a low-cost strategy to compete at the BOP. Its ability to craft a distinctive strategy is coherent with meeting the logistical, rational and emotional needs of the low-income consumer in the USA. Social implications Many businesses have neglected rural areas of the USA as being unprofitable. The ability for businesses such as Dollar General to serve the BOP segment can foster the socio-economic well-being of communities. Originality/value The overwhelming body of the BOP literature is based on emerging markets. To the best of the authors' knowledge, this is one of the few studies to investigate BOP business strategy in the USA.

Date: 2021-10-22
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Published in Journal of Business Strategy, 2021, 44 (3), pp.161-167. ⟨10.1108/JBS-06-2021-0104⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04080303

DOI: 10.1108/JBS-06-2021-0104

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