retail news in context, analysis with attitude

The Virginian-Pilot has a story about Dollar Tree's plans for Family Dollar once the Federal Trade Commission (FTC) finally approves the planned acquisition, including price cuts that get the chain back to its core competency.

CEO Bob Sasser said last week that "Family Dollar, which sells items for $10 or less, traditionally targets urban and rural consumers with lower incomes. Dollar Tree, in contrast, has items for up to $1 and aims for suburban middle-income shoppers. Family Dollar began charging too much for some items and opening stores in suburban areas, Sasser said. Some of those suburban stores might become Dollar Tree stores after the deal is complete."

According to the story, "Sasser described the merger as a 'transformational opportunity to serve more customers in more ways with more products.... Strategically, it ensures our future for many, many, many years to come." When combined, the companies will have a total of about 13,000 stores, and annual revenue above $19 billion.
KC's View:
Somehow, it doesn't feel like such an easy fix to me. Nothing is easy when there are 13,000 stores being managed. And very little ensures anyone's future for many years to come, especially in this competitive environment, with Aldi expanding and Lidl coming to the US.

That said, I saw a lot of small towns during the past week where dollar stores seemed to be the only grocery store. And so there is an enormous foundation on which to build.