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Market Intel, Forecasts & Strategies

The Dollar Store “Beauty Contest" is over

For several months Dollar General and Dollar Tree have been vying to buy Family Dollar, the 2nd largest small box retailer with over 8,000 stores.  This contentious “beauty contest” will go in favor of Dollar Tree, after Family Dollar shareholders approved the lower $8.81 billion offer.  Pending the US Federal Trade Commission (FTC) sign off, the merger of Dollar Tree and Family Dollar will create over 12,000 locations, making them the largest dollar store chain.

The plan is for both Dollar Tree and Family Dollar to keep their respective brand names, unlike the merger plans with Dollar General to re-brand all stores to Dollar General.  Also, this merger will require closing of far fewer stores, per FTC mandate, than if Dollar General won approval by Family Dollar shareholders.

Who really wins the beauty contest?  Likely – everyone! 

  • Fewer jobs are lost due to less corporate and distribution redundancy with a Dollar General merger.
  • Fewer stores will close which could have a significant impact jobs and the economy in Small Town, USA.
  • Family Dollar will benefit by process improvements by a seasoned retailer.  

Single tenant net lease investors will feel more secure that their dollar store investment in towns – large and small – will more likely live to see many more retail days and years. 

All in all, competition is good! Just think of how competition has made so many industries stronger and more innovative, which in turn has brought better prices and options to consumers.  For more information on this, please see the BloombergBusiness article.