Dollar General’s CEO, back at the helm, endeavors to steer a course correction amid regulatory penalties, disorganized store aisles, and public ridicule, including late-night satire

Dollar General is facing significant challenges, including steep fines for safety violations, negative publicity, and shareholder dissent. In response, CEO Todd Vasos outlined a plan during an earnings call to address the company’s performance and public relations issues. The strategy includes placing more workers at the front of stores, slowing down new store openings, removing underperforming items from shelves, and enhancing efforts to maintain product availability.

This marks Vasos’ first earnings call since returning to the CEO position after the ousting of his predecessor, Jeff Owen. The leadership change was deemed necessary to restore stability and confidence, according to the board’s chairman, Michael Calbert.

Despite surpassing Wall Street’s expectations for the fiscal third quarter, Dollar General has faced a tough year. While it remains the fastest-growing retailer by store count, sales have slowed, the stock price has dropped significantly, and the company’s reputation has suffered due to federal scrutiny over work conditions.

The company has incurred over $21 million in fines from the Occupational Safety and Health Administration (OSHA) for safety violations. Shareholders have also voted for an independent audit into worker safety, a move opposed by the company. Dollar General’s challenges have been compounded by inflation and broader labor issues, attracting attention from media outlets like HBO’s “Last Week Tonight with John Oliver.”

Dollar General’s stock has declined by approximately 46% this year, significantly underperforming the S&P 500’s 18% gains. The company anticipates same-store sales to decline by about 1% to remain flat for the full year.

Vasos emphasized a “back to the basics” approach, focusing on retail fundamentals and addressing specific issues such as high turnover of store managers and inventory management. The company plans to invest $150 million in additional store labor hours this year, with a shift away from overreliance on self-checkout.

Changes noticeable to shoppers will include more employees at the front of stores, a reduction in the number of items sold (currently between 11,000 and 12,000), and a shift away from self-checkout as the primary checkout method. Dollar General aims to open 800 stores, remodel 1,500 stores, and relocate 85 stores in the next fiscal year, emphasizing a focus on existing stores and cost reduction.

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