Dollar Tree Buying Family Dollar

arizonaguy
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Re: Dollar Tree Buying Family Dollar

Post by arizonaguy » January 8th, 2016, 10:19 am

storewanderer wrote:Dollar General is not a bad store, they have dotted various small towns in my area in Nevada; Sun Valley, New Washoe City, Gardnerville Ranchos, Silver Springs, Hawthorne, and also some of the little California towns such as Quincy and Chester.

Family Dollar has been more aggressive in building in Nevada but seems to be missing in California. So far two Reno Family Dollars have closed and converted to Dollar Tree. I expect more to close. Family Dollar is a dog.

Dollar General isn't a great experience for atmosphere or service but you get in and out quickly and the pricing isn't bad. I am waiting for the day these stores get into the pharmacy business.

I feel 99 Cents Only is a better store than any of these though.
99 Cents Only is a better store than Dollar Tree. However, there is a market for a Dollar General / Family Dollar format of a small general merchandise store. There are several areas where Walmart hasn't bothered to go and Kmart has closed where Dollar Tree or Family Dollar are the only general merchandise retailer. These areas are still perfect for the Family Dollar format. Dollar Tree (and 99 Cents only) do better in areas where there is general merchandise competition and the allure of almost everything being priced at $1 draws bargain hunters.

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Re: Dollar Tree Buying Family Dollar

Post by storewanderer » January 8th, 2016, 11:20 pm

Family Dollar and Dollar General have also done some favors to those small towns where Alco failed. What a trainwreck Alco was.

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Re: Dollar Tree Buying Family Dollar

Post by cjd » August 26th, 2018, 3:59 pm

I'm not sure when Dollar Tree and Family Dollar started out here but it must have been the 80s. I remember them since I was a kid, sometimes they'd even be in the same plaza.

Over here, I've noticed huge growth from Dollar General in the last few years. They've seemed to build stores in every little community in the past few years. I can count 5 new ones in my town alone including the further out communities. The new one near my house seems a bit more upscale than their older stores with polished concrete floors and warehouse ceilings, and has a grocery store like food section. It's not really cheaper than Walmart but cheaper than most convenience stores would be. It works in a pinch since I live about 10 miles from the grocery store.

Family Dollar on the other hand closed one of their older stores, kept the other and has only built one new store in the county. The older store that's still open at one time was quite a mess with stuff everywhere including on the floor, a backroom disaster, and floors that didn't look like they'd been cleaned in weeks or months. They would bring people from other stores to get it back into shape but it never stayed that way. It seems to be under control now but seems to be way overstocked with too many things for a smaller store.

The Family Dollar where my grandmother lives (very very small town) was a newer built one but when Dollar Tree bought them it closed and reopened as Dollar Tree. She loves it though and there's a newer Dollar General next door so she likes having the two in a town with no other retail.

We have an older Dollar Tree here, that used to be Everything's $1 years ago. It seems to be neat and clean whenever I go in. It's in a Plaza with a Publix which seems uncommon.

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Re: Dollar Tree Buying Family Dollar

Post by SamSpade » January 7th, 2019, 12:05 am

More movements with Dollar Tree (& subsidiary Family Dollar) as the company works to avoid being impacted by upcoming Chinese imports tariffs.

Where I live we really only have Dollar Tree, which are OK for the most part... and everything is still $1 or less.
Article on new HQ (includes store count by outlet): https://pilotonline.com/inside-business ... cf3e8.html
Article on jobs relocating from Charlotte, NC area: https://www.charlotteobserver.com/news/ ... 55815.html

Most recent move, activist hedge fund buying a large stake and trying to steer direction of the company: Reuters, via WSJ

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Re: Dollar Tree Buying Family Dollar

Post by storewanderer » January 7th, 2019, 7:53 pm

SamSpade wrote:
January 7th, 2019, 12:05 am
More movements with Dollar Tree (& subsidiary Family Dollar) as the company works to avoid being impacted by upcoming Chinese imports tariffs.

Where I live we really only have Dollar Tree, which are OK for the most part... and everything is still $1 or less.
Article on new HQ (includes store count by outlet): https://pilotonline.com/inside-business ... cf3e8.html
Article on jobs relocating from Charlotte, NC area: https://www.charlotteobserver.com/news/ ... 55815.html

Most recent move, activist hedge fund buying a large stake and trying to steer direction of the company: Reuters, via WSJ
It appears the "activist" investor wants them to sell off Family Dollar and consider price points above $1 in Dollar Tree.

I hope the current management sticks to their guns and is able to kick the "activist" investor out of the building. These types of outside analysts and observers have been critical of the $1 price point for years but the company continues to get a mix in its stores that people will shop for and continues to post strong financial results. We see how 99 Only has done since they started to screw around with their price points. Not well.

Money wasted on that new HQ tower probably would have been better used to chase off the "activist" investor.

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Re: Dollar Tree Buying Family Dollar

Post by TW-Upstate NY » January 8th, 2019, 9:47 am

Maybe I'm naïve when it comes to money and investing, but how can they even be a factor if they only own 1.7% of the shares?

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Re: Dollar Tree Buying Family Dollar

Post by arizonaguy » January 8th, 2019, 10:55 am

storewanderer wrote:
January 7th, 2019, 7:53 pm
SamSpade wrote:
January 7th, 2019, 12:05 am
More movements with Dollar Tree (& subsidiary Family Dollar) as the company works to avoid being impacted by upcoming Chinese imports tariffs.

Where I live we really only have Dollar Tree, which are OK for the most part... and everything is still $1 or less.
Article on new HQ (includes store count by outlet): https://pilotonline.com/inside-business ... cf3e8.html
Article on jobs relocating from Charlotte, NC area: https://www.charlotteobserver.com/news/ ... 55815.html

Most recent move, activist hedge fund buying a large stake and trying to steer direction of the company: Reuters, via WSJ
It appears the "activist" investor wants them to sell off Family Dollar and consider price points above $1 in Dollar Tree.

I hope the current management sticks to their guns and is able to kick the "activist" investor out of the building. These types of outside analysts and observers have been critical of the $1 price point for years but the company continues to get a mix in its stores that people will shop for and continues to post strong financial results. We see how 99 Only has done since they started to screw around with their price points. Not well.

Money wasted on that new HQ tower probably would have been better used to chase off the "activist" investor.
Family Dollar and Dollar Tree operate two divergent businesses with two different core customer bases.

Family Dollar is a "discount store" for small towns and also economically challenged urban neighborhoods. Other than Dollar General nobody else wants to touch these markets.

Dollar Tree on the other hand has a unique format that caters to urban and suburban shoppers in middle class areas where Walmart, Target, and traditional supermarket chains operate. Their $1 price point is their market niche in a crowded market.

Due to the differing formats and differing core customers and a real lack of synergy between the formats it may make sense for Dollar Tree to spin off Family Dollar. I never really understood the combination in the first place.

Another article I read indicated that the investor wants the majority of items to still be priced at $1 but wants to introduce $1.25, $1.50, $1.75, and $2 price points as well. I'm not sure how much this would alienate their core customer (especially if higher quality items could be brought in).

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Re: Dollar Tree Buying Family Dollar

Post by Brian Lutz » January 8th, 2019, 12:34 pm

On one hand, the "everything's $1" price point is a big selling point for Dollar Tree. On the other hand, the Daiso Japan stores (found mostly in California and Washington, with a couple of Texas locations) sell most items at a base price point of $1.50 (some food items fall below that) and also have other items that go as high as $10. Daiso stores are generally clean, well run and kept up well (unlike Dollar Trees, which generally seem to maintain cleanliness levels somewhere between "teenager bedroom" and "A tornado just passed by") and have a very different mix of merchandise than you'd find in a Dollar Tree.

Dollar tree seems to be very much a "pack 'em in and make it up in volume" operation. They throw stores in basically wherever they can find a spot for one (If you go down Highway 99 here in Snohomish County there seems to be a Dollar Tree roughly every 2 or 3 miles, and at least one in every smaller town) and ultimately the experience is much the same at all of them: Same merchandise in basically the same spots, same long line at the cashier, same messy shelves. It very much seems like the type of operation that depends on moving as much volume as possible as quickly as possible. Not sure that "slowing down" would benefit that type of operation much. I do think that a "dollar store" concept with slightly higher prices but better merchandise and a better looking store could do well. I don't think Dollar Tree is the one to do it, at least not in their current form.

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Re: Dollar Tree Buying Family Dollar

Post by storewanderer » January 8th, 2019, 6:18 pm

Brian Lutz wrote:
January 8th, 2019, 12:34 pm
On one hand, the "everything's $1" price point is a big selling point for Dollar Tree. On the other hand, the Daiso Japan stores (found mostly in California and Washington, with a couple of Texas locations) sell most items at a base price point of $1.50 (some food items fall below that) and also have other items that go as high as $10. Daiso stores are generally clean, well run and kept up well (unlike Dollar Trees, which generally seem to maintain cleanliness levels somewhere between "teenager bedroom" and "A tornado just passed by") and have a very different mix of merchandise than you'd find in a Dollar Tree.

Dollar tree seems to be very much a "pack 'em in and make it up in volume" operation. They throw stores in basically wherever they can find a spot for one (If you go down Highway 99 here in Snohomish County there seems to be a Dollar Tree roughly every 2 or 3 miles, and at least one in every smaller town) and ultimately the experience is much the same at all of them: Same merchandise in basically the same spots, same long line at the cashier, same messy shelves. It very much seems like the type of operation that depends on moving as much volume as possible as quickly as possible. Not sure that "slowing down" would benefit that type of operation much. I do think that a "dollar store" concept with slightly higher prices but better merchandise and a better looking store could do well. I don't think Dollar Tree is the one to do it, at least not in their current form.
Exactly. Dollar Tree in its current form has a formula that works and works well. They have surprising foot traffic in their stores and I have noticed they seem to do well in lower end neighborhoods and even in upper middle class type neighborhoods. They did close a store here in the past which seemed to have great foot traffic but I guess the issue was the average ticket was under $3 so it didn't work out for them. They need to get a certain "sales mix" across categories to make their stores work since a lot of the consumables they sell are at cost or at a slight loss. I don't really like Dollar Tree as a customer but cannot deny that they have a good working formula.

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Re: Dollar Tree Buying Family Dollar

Post by Brian Lutz » March 6th, 2019, 3:57 pm

Dollar Tree is planning to close up to 390 Family Dollar stores in 2019 and rebrand up to 200 more to Dollar Tree stores. High rents seem to be the main culprit:

https://komonews.com/news/business/doll ... -172603848

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