Dollar General Corporation Updates Approach to Cage-Free Eggs

In 2016, we set a goal to transition to 100% cage-free in-shell eggs by 2025, subject to available supply, affordability and customer demand. In response to a shareholder proposal asking for an update on progress towards this goal, in our 2023 proxy statement we explained that, given the current macroeconomic environment, the state of the egg production industry and the affordability needs of our customers, who are either unable or unwilling to pay a higher price for cage-free eggs if there is a lower price alternative, it is not reasonably practicable to transition to 100% cage-free in-shell eggs by 2025. Following this update, over 63% of shareholders voted against this shareholder proposal.

At Dollar General, we have a strong, ongoing shareholder engagement program and a well-documented track record of responsiveness to shareholder feedback. During our 2023 fall ESG-focused engagement meetings, we engaged with shareholders representing approximately 55% of our shares outstanding, including nine of our ten top shareholders, with our independent Chairman of the Board participating in meetings with shareholders representing approximately 38% of shares outstanding. During these discussions, we sought to understand, among other things, how these shareholders viewed the shareholder proposal, particularly those who voted in favor of the proposal. Most of the shareholders with whom we spoke during fall engagement did not support the shareholder proposal; however, those who explained why they voted in favor generally indicated they did so simply to convey their perspective that if a company publishes a goal, it is reasonable to seek disclosure of progress versus that goal. Under the circumstances explained in our 2023 proxy statement, these shareholders largely expressed support for the withdrawal of the goal.

Customer needs and preferences for lower-priced conventional eggs versus higher priced cage-free eggs, as well as supply availability for cage-free eggs, remain significant considerations. While we are hopeful that, with the passage of time, the price of cage-free in-shell eggs will decline so that cage-free eggs become a viable, equally affordable option, our responsibility remains oriented towards our customers and our shareholders. As a result, we are withdrawing our cage-free egg goal and do not believe it is in our customers’ or shareholders’ best interests at this time to establish a new goal. We appreciate the feedback from our shareholders and the support for ensuring that the customer remains at the center of all that we do.