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 US locations and last year opened around 400 stores.
Dollar Tree has a treasure hunt-like atmosphere in stores and caters to suburban, middle-income shoppers. It carries primarily seasonal goods, toys, stationary, home decor, kitchenware, and party items. Family Dollar is tailored to lower-income shoppers in rural and urban areas, and stocks more food and household basics than Dollar Tree.
All products at Dollar Tree sell for $1, although the chain is testing out a new initiative to sell select products from $1 to $5. Family Dollar sells most of its merchandise at various prices under $10.
New “combination” stores coming
Dollar Tree announced a plan Wednesday to crack the rural market by opening 50 new “combination stores” that feature elements of Dollar Tree and Family Dollar outlets and sell a mix of merchandise — Dollar Tree’s typical $1 seasonal items plus Family Dollar’s food and essentials for more than $1.
The concept is targeted at towns with 3,000 to 4,000 people, and Dollar Tree sees an opportunity to open around 3,000 of these stores.
Analysts say the new concept combines the appeal of both chains into one store.
“Dollar Tree generally has a better customer perception so it helps to brand the store with that banner, but the markets the company is targeting seem best served by Family Dollar,” Joseph Feldman, analyst at Telsey Advisory Group, said in an email. “The small markets Dollar Tree is targeting are underserved, which is why they are going after them.”