Dollar General built 20,000 locations by going where no one else would. Worth thinking about why that worked.

Hi,

Spent some time on Google Maps looking at small towns and kept seeing the same thing.

Zoom into a rural area, under 5,000 people. Not much national retail. A gas station, maybe a local shop. Then a Dollar General. That pattern repeats across a lot of towns across the South and Midwest.

More than 80% of their stores are in communities under 20,000 people. They now have 20,000+ US locations, more than Walmart, Target, and Costco combined. Not by competing harder for suburban corridors but by building most of their footprint in places those chains had passed on.

The markets they went into had low real estate costs and limited alternatives for customers. Average basket is small, around $15, but people come back often because the options are constrained. It's not a high-margin business and operating in remote areas adds real complexity. But the footprint kept growing.

What's hard to replicate now isn't the product or the brand. It's 20,000 rural leases accumulated over decades in markets most competitors never seriously evaluated. A 180,000 sq ft supercenter doesn't work in a town of 3,000. A 7,500 sq ft Dollar General does, at least financially.

The part that seems worth thinking about isn't the rural angle specifically. It's more the idea of finding markets where competitive pressure is structurally lower rather than just temporarily lower. Dollar General is a fairly concrete example of what that looks like over time, even if it came with real social costs that are well documented.

Has anyone seen something similar play out in software or services, where the unpopular market turned out to be the more defensible one?