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USA: Discounter To Open 3,000 Rural Dollar Tree-Family Dollar Hybrid Stores

Updated: Mar 31, 2021

A rendering of a combination Dollar Tree-Family Dollar store, which Dollar Tree began rolling out in rural communities in 2020.

Another one of the select few retailers to see positive momentum during the coronavirus pandemic is doubling down on its growth. Dollar Tree announced on its year-end earnings call that it plans to open 3,000 locations of a new hybrid concept store specifically designed for rural communities of 4,000 people or fewer, Retail Dive reports. The stores combine Dollar Tree with Family Dollar, the competitor that Dollar Tree acquired in 2015, under the same roof.

The first 50 Dollar Tree-Family Dollar locations opened between 2019 and 2020, and in the fourth quarter, comparable sales at those stores rose 20%, according to Dollar Tree's earnings call. Stand-alone Dollar Tree same-store sales grew by 2.4% in Q4, and Family Dollar same-store sales rose 8.1% over the same period, continuing a tendency for the overall dollar store category to outperform retail on the whole during economic downturns. As pandemic conditions have made rural shoppers more likely to stay closer to home when venturing out for essential goods, rural retail has shown more resilience than its urban and even suburban counterparts. Still, the relative lack of national brands that can sustain locations in communities of fewer than 4,000 people presents an opportunity for Dollar Tree, CEO Mike Witynski said on the earnings call.

Of the 3,000 new stores, a number Witynski pegged as a "minimum", Dollar Tree aims to open 600 in 2021 alone, Chain Store Age reports. More integration between the daily and essential-goods Family Dollar products and the seasonal, "treasure hunt" inventory strategy of Dollar Tree will also come to previously existing stores, of which the company plans to renovate 1,250 in 2021.

As of the end of January, Dollar Tree operated 15,685 stores across 48 states and Canada.

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