Dollar Tree to expand Family Dollar 'Combo Stores' this year

Dollar Tree made headlines last year when the company said it would be raising its price point to $1.25. Now, the value retailer has announced that it will be opening 400 ‘Combo Stores’ this year, combining Dollar Tree and Family Dollar selections, allowing for a larger selection of private brands for customers.

First covered by Store Brands’ sister publication Progressive Grocer, Dollar Tree president and CEO Michael Witynski said the company is looking to continue growing by expanding the combo format.

During Q4 2021, the company opened 174 new stores, expanded or relocated 24 stores, and closed 65 stores. The company also completed 23 Family Dollar store renovations. But it's the footprint of the company's new Combo format that the retailer plans to substantially augment. Dollar Tree ended the year with more than 240 Combo Stores and is planning to add another 400 Combo Stores this year.

“At Family Dollar, our Combo Stores are working,” said Witynski. “Customers love shopping the best of Family Dollar and Dollar Tree in one easy-to-shop local store in their community. The stores are driving a material comp sales lift, increased productivity, higher gross margins and improved operating performance.”

For the fourth quarter ended Jan. 29, Dollar Tree net sales increased 4.6% to $7.08 billion from $6.77 billion in the prior year’s fourth quarter. Enterprise same-store sales increased 2.5%. Same-store sales for Dollar Tree increased 3.1%. Family Dollar same-store sales increased 1.7%. For the Dollar Tree banner, December was the strongest comp month of the quarter as it cycled a slight negative from the prior year. November was a low single-digit positive comp, and January was the lowest comp month as it cycled the strongest comp month of the prior year’s quarter.

At Family Dollar, November was the strongest comp month of the quarter, closely followed by December. Both periods were above the quarterly comp of 1.7%. January was a negative comp as it cycled a double-digit comp from the prior year related to the release of stimulus dollars. Additionally, retail in January was impacted by the Omicron variant, much colder and stormier weather than the prior year and the lapsing of the monthly child tax credit advanced payments.