Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account “Let’s clean it up, fill it up and straighten it up,” Witynski said. The company hopes these lower prices, new store designs and better merchandise will reverse Family Dollar’s decline. And new “H2” Family Dollar stores showcasing special Dollar Tree $1.25 merchandise sections and more freezers and refrigerators than traditional Family Dollar stores. Some Wall Street investors have pressed Dollar Tree to sell Family Dollar.įamily Dollar has closed hundreds of locations in recent years and renovated others.The chain has also experimented with different formats to try to improve sales - such as “combination” stores that feature selections of both Family Dollar and Dollar Tree merchandise, designed specifically for small towns. Still, the combined company has struggled in the eight years since then and its stock price has trailed competitors. Shoppers have shifted to Dollar General, Walmart, Target and other low-priced chains to stretch their budgets.ĭollar Tree bought Family Dollar in 2014 for almost $9 billion, but these problems started before the acquisition, according to analysts. “Now can they build on that momentum?”įamily Dollar, with its 8,000 or so locations, has been plagued by a range of issues including cluttered, understaffed, and, in some cases, hazardous stores. “It’s a logical step,” Michael Montani, a retail analyst at Evercore ISI, said of the price cuts. The strategy appears to be working so far: Last quarter, foot traffic to Family Dollar stores increased for the first time in three years. “Family Dollar, from a pricing perspective, is in the best position in more than a decade.” Prices are at “parity with key competitors,” Dollar Tree CEO Michael Witynski said on an earnings call last week. Analysts estimate that the chain’s prices have fallen by around 5% since the company announced the initiative in August. (DLTR) - Family Dollar’s parent company that caters to middle-class, suburban shoppers - hiked prices to $1.25 last year after 35 years of sticking to $1.Īlthough lower prices will squeeze Family Dollar’s profit in the short term, the executives believe the measures are necessary to revive the chain.įamily Dollar has not said by how much its prices will drop, and a spokesperson noted prices change constantly and vary by product. The price cuts are part of Family Dollar’s new management’s attempt to overhaul the company’s brand image, and they come as most companies are raising prices to offset higher costs and consumers battle decades-high inflation. There's a big problem with the Kroger-Albertsons supermarket merger Jason Armond/Los Angeles Times/Getty Images A shopper visits Albertsons at 3901 Crenshaw Blvd on Friday, Oct.
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