Dollar General Expands AI With Shelf Engine for Produce Forecasting, Store Efficiency

Dollar General has moved from pilot to scale with Shelf Engine’s AI-driven produce forecasting and automated ordering, deploying the technology in about 3,000 stores after a two-phase pilot that began in December 2022 and initially covered 60 then 400 stores. Allen Warch, vice president and division merchandise manager of fresh merchandise at Dollar General, said the collaboration "is a strategic step towards improving our operational efficiency while serving our customers with improved in-stock levels of fresh produce."

Shelf Engine’s platform, as described by the company, "generates new probabilistic models for each unique SKU for every store, every day" and is "designed to generate orders, with a goal of optimizing in-stock levels that directly contribute to providing Dollar General customers with the freshest food possible." Shelf Engine executive Kalb summarized the data pipeline: "Basically, what we do is we ingest data from what the vendors are delivering and what the retailers are selling, and then we have a bunch of external datasets that we ingest, everything from what are the promotions that are happening to delivery schedules [to] case packs and ... process it into the AI. Basically, it creates a forecasting model for every SKU for every store for every day."

The produce push is part of a broader merchandising and operations strategy. About 5,000 Dollar General stores currently offer fresh food, and the company plans to expand produce to more than 10,000 stores in the next several years. The company frames the Shelf Engine deployment as a mechanism to reduce food waste while ensuring stocked shelves as fresh assortments are rolled into stores that historically were not classified as grocers.

Dollar General has paired external partnerships with internal organizational changes. The retailer appointed Travis Nixon as senior vice president of artificial intelligence optimization; Nixon most recently led AI for Dropbox’s security division and previously held leadership roles at Meta and Microsoft. Steve Deckard, executive vice president of strategy and development, said the hire "represents our commitment to driving innovation to unlock value in our operations" and that with deeper AI integration the company expects to accelerate "operational excellence, cost efficiency, and customer-centric innovation."

Scaling AI across nearly 21,000 stores requires infrastructure investment. Dollar General allocated $48 million to information systems and technology projects in the first 39 weeks of fiscal 2025 to modernize IT and support large-scale AI deployment aimed at controlling overhead through automation. That investment sits alongside recent operating results: net sales rose 5.1% year over year to $10.7 billion in a Q2 reported in August, same-store sales increased 2.8%, and the company raised full-year guidance.

Investors have taken note of the strategy; the stock climbed 117.3% over the past year while the company’s forward 12-month price-to-earnings ratio stands at 21.73 with a Value Score of B versus an industry average forward P/E of 33.91. As Dollar General expands produce into thousands more locations and integrates AI into merchandising, supply chain, and store operations, the company is betting that automated ordering and the Nixon-led AI team will tighten in-stock performance, trim waste, and help control overhead as fresh assortments scale.