- Dollar Tree will be selling alcohol at 1,000 of its Family Dollar stores.
- Management is hoping that this will drive more frequent visits to the stores.
- Since Dollar Tree acquired Family Dollar in 2015, it has been a drag on the company’s earnings. Dollar Tree is now taking action to improve its sales.
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Dollar Tree has a simple solution to Family Dollar’s woes: alcohol.
The dollar store chain announced on Thursday that it started selling alcohol at some of Family Dollar stores and plans to roll this out to around 1,000 locations.
It is part of a broader plan to drive more frequent visits to the stores.
CFO Kevin Wampler said in a call with investors on Thursday that the company is “very excited” about offering this new product. A spokesperson for the company did not immediately respond to Business Insider’s request for comment to confirm exactly what would be sold.
It has been four years since Dollar Tree bought Family Dollar, and so far, it’s been a disappointing run.
Analysts say that Family Dollar has been a drag on Dollar Tree’s earnings. In its most recent quarterly results, same-store sales numbers improved for the Family Dollar brand but grew at a much slower pace than at Dollar Tree.
Dollar Tree is taking the steps to address this. It is closing underperforming stores, rebranding some of its Family Dollar stores into Dollar Tree stores, and testing out expanded assortments in certain stores.
And this seems to be paying off. On Thursday, the company said that its new and recently renovated stores, which have a more merchandise and more freezer items, have seen increased foot traffic, and an average same-store sales increase of more than 10%.
Dollar Tree has also been rolling out a new selection of pricer products, which cost more than $US1, at certain stores since May. The company said Thursday that this initial testing would now be expanded to more than 100 urban, suburban, and rural store locations.