Dollar Tree announces new stores as demand for discount retailers soars

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Dollar Tree said on Wednesday it will open 600 new stores this year, suing dollar store chains steamy growth across the United States.

The announcement comes as the pandemic has taken its toll on many retailers and forced thousands of stores to close. But dollar stores have risen as shoppers strapped for savings seek great deals on food, household essentials and other items. Dollar Tree said on Wednesday that sales at stores open for at least a year were up 4.9% in the 13 weeks ending Jan. 30, compared to the same period a year ago.

The company, which also owns the Family Dollar chain, will open 400 Dollar Tree stores and 200 Family Dollar stores this year. The two chains combined have nearly 15,700 locations in the United States and last year opened about 400 stores.

Dollar Tree has a scavenger-hunt atmosphere in the stores and caters to middle-income suburban shoppers. It mainly offers seasonal products, toys, stationery, home decor, kitchenware and party supplies. Family Dollar is designed for low-income shoppers in rural and urban areas, and stores more food and basic items than Dollar Tree.

All of Dollar Tree’s products sell for $ 1, although the chain is testing a new initiative to sell select products for $ 1 to $ 5. Family Dollar sells most of its merchandise at various prices below $ 10.

New “combined” stores are coming

Dollar Tree has fallen behind rival Dollar General in recent years. Dollar General opened approximately 1,000 stores per year and now has more than 16,000 locations in the United States. The business primarily caters to low and middle income clients in rural and suburban areas.

Dollar Tree on Wednesday announced a plan to break into the rural market by opening 50 new “combo stores” that feature elements of the Dollar Tree and Family Dollar outlets and sell a mix of merchandise – the typical seasonal $ 1 Dollar Tree items. as well as food and essentials from Family Dollar for more than $ 1.

The concept is aimed at cities of 3,000 to 4,000 inhabitants, and Dollar Tree sees an opportunity to open approximately 3,000 of these stores.

Analysts say the new concept combines the appeal of the two chains into one store.

“Dollar Tree generally has a better perception of customers, which helps brand the store with this banner, but the markets targeted by the company appear to be best served by Family Dollar,” said Joseph Feldman, analyst at Telsey Advisory Group, in a statement. E-mail. “The small markets that Dollar Tree targets are underserved, which is why they are chasing them.”

Dollar General, meanwhile, is test a new store concept of its own: Popshelf. The new stores carry a range of home and beauty items, the majority of which will cost around $ 5. Popshelf stores target suburban women who earn between $ 50,000 and $ 125,000 per year.


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