The parent company The Dollar Tree, which also holds Family Dollar, has had historically steady growth. The average growth rate over the last six years, according to CSG’s historical analysis, has been a remarkable 24.75%. In the first fiscal quarter of 2019, the retailer announced a 4.6% sales increase, which allows it to experiment with new ideas and possible rebranding.
Last month, CSG released an article on Dollar Tree speculating how the “everything is a dollar” store was going to cope with the rise on tariffs for Chinese imports. There were only two possible outcomes for the retailer: convince suppliers to lower their costs or raise consumer prices. In an announcement on May 30, the company proposed plans to create a “Dollar Tree Plus” program which would introduce new products at a higher cost while maintaining current merchandise prices. So far, the company is only testing the new program in 100 stores to gain insight on how their clientele will respond.
Family Dollar, which was acquired in 2015 and has always sold merchandise over one dollar, will be getting a new product line as well: alcohol. The struggling retailer was able to turn its numbers around in the last few years and to keep the momentum executives announced their intention to sell adult beverages at 45 Family Dollar locations with plans to increase that number to 1,000 by the end of 2019’s fiscal year. The idea behind the new product line isn’t to increase profit margins on the alcohol alone, since liquor doesn’t have a high markup, but to get new customers in the door. It’s a guarantee that consumers will add other items to their shopping carts while browsing for their favorite liquor, which in turn, will boost the company’s sales numbers.
Experimenting with new concepts is a must for any retailer hoping to stay current and pull in new customers. The Dollar Tree is rolling out several plans for both their companies which will not only add fresh new products to their shelves but also bring in new clientele who will continue to shop at the trendy low-cost retailer.