Dollar General to Build New Distribution Center in East Texas

With dollar stores a top retail growth segment, this nearly 1 million-square-foot structure will be the 17th such facility for this major player.

Dollar General's Longview distribution center
Dollar General’s Longview distribution center

Dollar General Corp. will be building a new distribution center in Longview, in Gregg County, Texas, the company announced late last week.

Once at full capacity, the nearly 1 million-square-foot building is expected to create some 400 permanent jobs and serve roughly 1,000 Dollar General retail locations in Texas and the Southeast. Construction is expected to start in early 2018, pending permits and approvals.

This facility is expected to support Dollar General’s growing store count in Texas, where we already operate more than 1,400 current locations and have complementary operations in San Antonio,” Todd Vasos, Dollar General’s CEO, said in a prepared statement.

The Longview distribution center will be the 17th such facility in the discount retailer’s distribution network and its second in Texas. In 2016, Dollar General opened its first Texas distribution center, in San Antonio.

The company’s 16th distribution center is under construction in Amsterdam, N.Y. Dollar General currently operates north of 14,000 locations nationwide.

Longview is in East Texas, roughly 100 miles east of the Dallas-Fort Worth Metroplex by way of I-20 and only 50 miles west of Shreveport, La.

Clayco is the project’s general contractor, Leo A. Daly is the architectural engineering firm and Elan Design is the civil engineering firm.

Dollar General declined to provide additional information requested by Commercial Property Executive, and Leo A. Daly could not be reached for comment.

Rise of the dollar store

Dollar stores are thriving in places that aren’t. In a CPE commentary last August, Randy Blankstein, president of The Boulder Group, noted that free-standing Dollar General, Dollar Tree and Family Dollar locations continue to multiply as these chains expand aggressively, often through new construction.

Cap rates are rising in the dollar store sector, he said, adding that “the net lease dollar store sector will remain active because investors are attracted to the higher yields this asset class generates when compared to other net lease sectors.

Meanwhile, a Bloomberg article in October looked at a small Arkansas town that lost its Walmart Express but eventually snared a Dollar General to fill the space. The article quoted Cushman & Wakefield’s director for retail research, Garrick Brown, who observed that the dollar store chains are making a big bet that the United States will have a permanent underclass. The strong expansion of these chains, he said, is “based on the concept that the jobs went away, and the jobs are never coming back, and that things aren’t going to get better in any of these places.”