Dollar Tree (DLTR) has announced plans to close 600 Family Dollar stores in the first half of fiscal 2024, followed by an additional 370 Family Dollar and 30 Dollar Tree locations once their leases expire, totaling 1,000 closures. The decision comes amidst disappointing earnings, with Dollar Tree reporting a net loss of $1.7 billion for Q4, partly attributed to charges related to portfolio review and impairment. The closures signal a recognition of ongoing challenges in integrating Family Dollar since its acquisition in 2015, including a weak brand image and supply chain issues.

 

What is the difference between Dollar General and Family Dollar/Dollar Tree's ownership structure?

Dollar General is private equity owned

What is the difference between Dollar General and Family Dollar/Dollar Tree’s ownership structure?

Unlike Family Dollar and Dollar Tree, Dollar General does not have a centralized ownership structure. Instead, its ownership is dispersed among various institutional and individual investors. The largest shareholder is Vanguard Group, Inc., followed by BlackRock, Inc., and Capital International Investors.

This ownership structure, characterized by a diverse range of institutional and individual investors, may contribute to Dollar General’s success as a privately-owned company. By having a wide array of stakeholders with significant stakes in the company, Dollar General benefits from a variety of perspectives and strategic inputs.

 

What Family Dollar and Dollar Tree stores are closing, and where?

Both Family Dollar and Dollar Tree stores concentrated in an urban area with a strong market presence.

What Family Dollar and Dollar Tree stores are closing, and where?

Both Family Dollar and Dollar Tree will be affected by these closures, with approximately 600 stores scheduled to shut down this year and an additional 370 stores in the coming years as their leases expire. The affected stores are spread across the country, primarily concentrated in urban areas where Family Dollar has established a strong presence. We’ve seen other big-box retailers who have specific needs in their retail spaces, like cold storage, warehouse space, or a strip-mall building footprint. For example, we wrote previously about Target’s knack for backfilling former Kmarts. Get Started with PlannedRetail

What companies might be interested in former Dollar Tree and Family Dollar locations?

Competitors such as Dollar General, Walmart, and Target may express interest in acquiring these spaces. 

What companies might be interested in former Dollar Tree and Family Dollar locations?

As the retail landscape undergoes transformations, attention is now focused on potential buyers for the vacant Family Dollar and Dollar Tree locations. Competitors such as Dollar General, Walmart, and Target may express interest in acquiring these spaces. These companies actively seek out locations that meet specific criteria, including ample parking, cold storage facilities, and diverse store footprints, making former Family Dollar and Dollar Tree sites attractive prospects.

Recent trends indicate that certain retailers, like Target, actively pursue closing or closed Kmart locations as part of their expansion strategies. These sites often possess the necessary infrastructure and space requirements, such as parking facilities and large-scale layouts, which align with Target’s growth objectives. Similarly, Dollar General, Walmart, and other retailers may leverage the availability of former Family Dollar and Dollar Tree sites to strengthen their market presence.

The closures of Family Dollar and Dollar Tree stores have raised concerns regarding the future of their existing pipelines, including projects that are currently in the planning and construction stages. The uncertainty surrounding these ventures has been highlighted by companies such as BuildCentral, which monitors retail development projects, through Planned Developments GEOSPEX, a mapping tool.

The closure of nearly 1,000 stores by Family Dollar and Dollar Tree, two retail chains that cater to budget-conscious consumers, highlights the significant challenges faced by the discount retail sector. These closures can be attributed to a combination of factors, including years of mismanagement, fines imposed due to subpar facilities, and intense competition from industry giants such as Dollar General, Walmart, and Target whom are doing great. Get Started with PlannedRetail