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Family Dollar May Shutter Some Stores

Owner initiates a “comprehensive review” of brand

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Photography: tupungato/iStock.com

While Dollar Tree (Chesapeake, Va.) stores continue to attract customers from a broader and higher range of income levels, CEO Rick Dreiling says the company’s Family Dollar unit recent performance has fallen short of expectations. As a result, Retail Dive reports, the retailer has initiated “a comprehensive review of our Family Dollar portfolio to address underperforming stores that are not aligned with our transformative vision for the company,” Dreiling said during Dollar Tree’s most recent earnings call with analysts.

That analysis will involve identifying stores for possible closure, re-bannering or relocation. Most new Dollar Tree customers have annual household incomes over $125,000, and that demographic “was a significant contributor to Dollar Tree’s quarter-three comp growth,” Dreiling said during the call. But while Family Dollar’s price-value perception remains strong, the banner didn’t perform as anticipated.

“Going forward, we need to ensure that the Family Dollar portfolio is well-positioned for success and meets the financial and operating objectives of our organization and the expectations of our valued customers and associates,” Dreiling said. “We believe that this action will fortify our base, strengthen our brand and allow Family Dollar to achieve its full growth potential.”

Slightly more than half of the company’s approximately 16,622 stores operating as of Oct. 28 bear the Family Dollar banner, Retail Dive reported. Dollar Tree bought Family Dollar in 2015.

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