Growing up in rural Horowhenua our closest store for bread, butter and milk was the local Four Square. The store offered convenience (with the closest supermarket more than 10km away in Levin), but with that convenience came higher prices. A quick check on the company’s website shows 500g of butter is currently on special for $5.99, a 25% premium on a block of Tararua’s finest at Countdown.

We have recently added a US convenience store operator called Dollar General to the international portfolio. The company predominantly opens stores in rural parts of the US with similar floor plans to a Four Square. The glaring difference between the two businesses is that Dollar General prices its items at a 20-40% discount to supermarkets. Carrying on with my comparison, Dollar General sells butter for NZ$3.60, or 25% lower than Countdown. The strong customer proposition of convenience and low prices has enabled Dollar General to continually take market share from traditional supermarkets.

Dollar General sells a range of everyday household items including food and cleaning products, as well as toys, stationery and basic apparel. It has one of the most successful track records in the US retail industry and has delivered same-store sales growth for 29 consecutive years.

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