A poster inside a Dollar General store in Chicago.
Jim Young | Reuters
Dollar General CEO Todd Vasos said Wednesday that the retailer is pursuing business opportunities in healthcare for one simple reason: about 65% of the company’s stores are in “sanitary deserts”.
This translates into more than 10,000 stores, including many in rural areas and small towns, where customers have to drive long distances to get medical care, Vasos said.
He said the retailer is in a prime position to change that.
“While it is in its infancy, we really have the opportunity to grow this healthcare side of the business, not just the store’s products, but the services,” he said at a virtual conference hosted by Barclays.
Dollar General has recently announced plans to expand into the healthcare industry. In July, Deep Discount said it had hired its first chief medical officer and planned to add more health-related items to shelves, from dental supplies to cold and cough medicines.
However, the company has provided few details on how their offerings may be.
Vasos said Dr. Albert Wu, the new chief medical officer, chaired the first meeting of the company’s steering committee on Tuesday and encouraged investors to keep up.
The expansion could also affect the company’s reputation. For years, Dollar General has faced criticism for aggravating food deserts – neighborhoods and communities where consumers struggle to find affordable nutritious food, such as fruits and vegetables. As the retailer has quickly opened more locations, some lawmakers have said it has scared off groceries that would provide a wider selection of fresh, healthy items.
Dollar General has been adding meat and products to stores. They are now in addition to 1,300 stores, or about 7% of their total footprint, and he has said he can expand it to 10,000 stores.
Still, Vasos said sanitary deserts could be an even bigger problem.
“There are as many, if not more, health / medical deserts in rural America than there are food deserts,” he said. “We believe we have the ability to serve the consumer in many of these cases where today you have to drive 30, 40 minutes to get basic health care.”