Private Brand Growth On Tap at Dollar Tree

Following a solid first quarter in which Dollar Tree reported comparable store sales growth at its Dollar Tree and Family Dollar stores, the discount retailer is focused on new opportunities to expand its private brand product line. 

For the quarter ended March 31, company-wide sales were up 6.1% to $7.32 billion. Same store sales at Dollar Tree and Family Dollar rose 3.4% and 6.6% respectively. Company officials said the growth was concentrated in consumables and driven by “meaningful transaction growth.”

At its Family Dollar stores, the retailer increased penetration of private brand products by approximately 0.8%, Rick Dreiling, Dollar Tree’s chairman and CEO said during an investor conference call. 

“Moving forward, we expect to continue growing the penetration of private brands as we further improve merchandise, presentation, packaging, and quality control standards,” he said. “We recently opened a new test kitchen in Chesapeake (Virginia) and are excited about our growing pipeline of private brand products across consumables, health and beauty, and other high-growth categories.”

Dreiling noted expanding the retailer’s private label business also offers new opportunities for enhanced margins. Following its pricing actions last year at Family Dollar to bring the company in line with direct competitors, this served to strengthen the retailer’s value offering at Family Dollar and followed the transition to the $1.25 pricepoint at Dollar Tree, he added. 

“Along with investments in wages and store standards, the steps we have taken on pricing across both segments are critical to improving our long-term financial and operating performance,” he said.

Dreiling noted that Dollar Tree’s focus on boosting its private label selection in consumables and health and beauty care will serve to give shoppers more options while also allowing the retailer to accelerate margin growth. He did not offer specifics on when additional private brand products would be on store shelves.