Despite overall growth, Dollar Tree announced in March the closure of 970 Family Dollar Stores and 30 Dollar Tree stores as part of its “portfolio optimization review.” By the end of the first quarter of fiscal 2024, 550 stores officially closed. An official list has not been released, but according to CBS News, as of March 2024, Pennsylvania and Mississippi seem to have the most closures so far, with 22 in the Magnolia State and six in the Keystone State.
In May, Dollar Tree, Inc. acquired designation rights for 170 leases of 99 Cents Only Stores in Arizona, California, Nevada, and Texas after 99 Cents Only filed for Chapter 11 bankruptcy.
This acquisition is part of the company’s accelerated growth strategy, according to Michael Creedon, Jr., Dollar Tree’s chief operating officer.
“The portfolio complements our existing footprint and will provide us access to high-quality real estate assets in premium retail centers, enabling us to rapidly grow the Dollar Tree brand across the western United States, reaching even more customers and communities,” Creedon said, in a release.
Earlier in June, Dollar Tree, Inc. started a review of strategic alternatives of the business segment, which could include a potential sale or other disposition depending on the needs of each banner store.
“Our goal is to position both the Dollar Tree and Family Dollar banners to progress further and faster, and to determine whether the exclusive attention of a dedicated team will benefit both, while creating value for Dollar Tree shareholders and other stakeholders,” said Rick Dreiling, chairman and CEO of Dollar Tree.
No deadline has been set for the completion of this review.
Filling the Gap
Dollar Tree, Inc.’s large number of closures and business review presents a unique opportunity for both existing dollar stores and new entrants to fill the gap.
Dollar General has plans to open 730 new stores, 1,620 remodels, and 85 store relocations, as well as execute 2,435 real estate projects in 2024. It even celebrated the grand opening of its 20,000th store in Alice, Texas. Dollar General’s continuous enhancement of its product range — including consumables, fresh and frozen foods and beauty products — strengthens its appeal to a broad demographic.
ALDI is one of the fastest-growing grocery stores in the U.S. and plans to open 800 new stores nationwide by the end of 2028. Through its acquisition of the Winn-Dixie and Harveys Supermarket chains, ALDI is transforming its stores to rival traditional supermarkets in terms of product variety and quality.
Ollie’s Bargain Outlet could attract consumers looking for deep discounts on branded items. The company is planning an expansion with new store openings, making it a viable option for communities needing a replacement for Family Dollar. Ollie’s also acquired 11 former 99 Cents Only Stores locations in key markets across Texas.
Targeted primarily at the tween and teen market, Five Below could fill the retail void in areas where teens and young families are predominant. The company has been successful in resonating with younger shoppers through an appealing mix of trendy, low-cost items and is currently on track to open over 230 new stores in the coming year.
