Dollar Tree considers selling Family Dollar stores

Months after announcing the planned closure of nearly 1,000 Family Dollar stores, Dollar Tree said it is considering selling the business as high inflation continues to squeeze consumers’ budgets.

Company officials confirmed Wednesday that Dollar Tree has began a review of its Family Dollar business segment which could lead to “a potential sale, spin off or other disposition of the business.”

“The unique needs of each banner at this time — transformation at Family Dollar and growth acceleration at Dollar Tree — lead us to the decision to conduct a thorough review of strategic alternatives for the Family Dollar business,” Dollar Tree CEO Rick Dreiling said in a statement.

“Our goal is to position both the Dollar Tree and Family Dollar banners to progress further and faster, and to determine whether the exclusive attention of a dedicated team will benefit both, while creating value for Dollar Tree shareholders and other stakeholders.”

The company did not immediately set a deadline for the review.

Retailers have been struggling to adapt to a weakened demand for discretionary spending as buyers continue to see higher prices at stores, Reuters reported. The news agency noted that Dollar Tree bought Family Dollar in 2015, and it has been the company’s “main underperformer.”

On Wednesday, Dollar Tree shared that it saw a softer Easter season, a time when the stores typically see higher demand, according to The Wall Street Journal. At Dollar Tree, the company reported same-store sales up by 1.7% while they were up just 0.1% at Family Dollar locations.

Dreiling said that at Family Dollar, the company is “taking the steps necessary to position the business for long-term success.”

The announcement came one week after Dollar Tree announced that it had acquired the leases for 170 stores under the 99 Cents Only brand in Arizona, California, Nevada and Texas. Company officials said they were looking to open the stores as early as fall 2024.

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