Dollar Tree has announced the closure of 600 underperforming Family Dollar outlets by June, as well as the closure of 370 Family Dollar and 30 Dollar Tree stores upon the expiration of their respective lease agreements.
Dollar Tree possesses a total of 16,000 stores, comprising of 8,000 stores under the Dollar Tree brand and 7,500 locations under the Family Dollar brand.
Dollar Tree has revealed that its expenditures for the end of 2023 exceeded their initial projections, as announced.
During its investor presentation for 2023, Dollar Tree reported challenges for its Family Dollar brand. The company’s Family Dollar stores experienced a decline of 1.2% in same-store net sales compared to the previous year’s quarter. On the other hand, Dollar Tree’s locations saw an increase of 6.3% in same-store net sales.
According to Bob LaFleur, the senior vice president of investor relations at Dollar Tree, a careful and intentional strategy was utilized to handle underperforming stores. This involved taking into account the performance of each specific store, the local operating conditions, and the overall goal of achieving operational efficiencies throughout the portfolio. The decision to rationalize these unprofitable locations is expected to result in significant value for the company as a whole.
Dollar Tree has reported that the majority of their products will be available for purchase at a price of $1.50. However, the company anticipates selling a greater number of items at higher price points. LaFleur stated that their stores will also have products priced up to $7.
According to LaFleur, Dollar Tree customers will now have access to a larger variety of options in different categories such as food, snacks, beverages, pet care, and personal care. However, despite the expansion of their multi-price selection, the majority of items sold at Dollar Tree stores will still be offered at their fixed price point of $1.50. As time goes on, there will be a greater incorporation of multi-price products throughout the stores.
Customers can now purchase bags of dog food for $5, alongside the usual $1.25 pet treats and toys. Additionally, the candy aisle will now feature $3 bags of candy. This marks the next development in the Dollar Tree’s commitment to providing affordable options, with a wider range of products and increased savings.
In 2023, Dollar Tree announced that it implemented variable pricing in 5,000 of its locations and plans to extend this strategy to 2,000 more locations by the end of this year.
In the coming years, Dollar Tree has stated that their products may potentially increase in price up to $10. However, the company is uncertain about the timeline for this change, as the combination of increased shrinkage and inflation may hinder this from occurring in the near future.
The list of store closures has not yet been released.
