Dollar General (NYSE: DG) has been one of the major success stories during a challenging period for many retailers. While a significant number of other chains are getting smaller or closing up shop altogether, it has been adding stores at a pace of around 1,000 per year.

What has Dollar General done?

To support its continued growth, which will include adding about 900 stores in 2018, the company plans to build a new distribution center in Longview, Texas. The facility, the chain's 17th distribution center and its second in Texas, will employ about 400 people.

It will serve as the primary distribution location for about 1,000 stores. The deal does still require government permits and approvals, but construction is expecting to begin early this year.

"Dollar General is excited to expand our supply chain and distribution operations in the Lone Star state with today's announcement," said CEO Todd Vasos in a press release. "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."

Why is Dollar General thriving?

The chain's stores tend to be neighborhood focused, and primarily carry things people need immediately -- and therefore would be less apt to order online. In addition, Dollar General offers low prices, though it's not technically a "dollar store." By placing relatively small, easy-to-shop discount stores in high-traffic areas, it fills a niche not met by bigger supermarket chains.

The company has very little online presence, choosing instead to use a store-first model. That has been a successful play for the chain; its locations may not deliver big same-store growth numbers once they mature, but they do provide consistent, predictable profitability.

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The author(s) may have a position in any stocks mentioned.

Daniel B. Kline has no position in any of the stocks mentioned.

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