Dollar Tree’s chief executive officer says the company will cut prices of some items and improve the appearance of Family Dollar stores once it completes its $8.5 billion purchase of the Matthews-based chain.
At the annual shareholders meeting in Virginia Beach, Va., Dollar Tree CEO Bob Sasser said Family Dollar had strayed from its strategy over the years by adding stores in suburban areas and raising too many prices, reports the Virginian-Pilot.
“Even if you’re a low-income customer, you can have a clean store. You can have a bright store. You can have a friendly store,” Sasser said of the plan to clean up Family Dollar stores, according to the Virginian-Pilot.
Family Dollar adopted a strategy of more frequent discounts to attract customers about four years ago when then-Chief Operating Officer Michael Bloom was hired. The strategy was a departure from its longtime commitment to being a low-price leader, and early last year the company fired Bloom because of disappointing financial results.
Analysts also say they anticipate Family Dollar – which sells a variety of items including groceries for $10 or less – to lower prices to be more competitive after the close of the Dollar Tree deal, which is supposed to happen in early July.
Last month, Chesapeake, Va.-based Dollar Tree, which sells everything for $1 or less, said it reached an agreement to sell 330 Family Dollar locations to a private equity firm as part of its planned acquisition. The store divestiture is designed to address competition concerns raised by federal regulators.
The combined Dollar Tree company will have more than 13,000 stores and will be the biggest dollar store chain in the U.S. by store count.