While it may not be as cheap as some jokes would suggest, Family Dollar is back on the market less than a decade after Dollar Tree acquired the chain.
Family Dollar currently operates around 8,000 stores in the United States, offering low-priced items to shoppers, typically ranging from $1 to $10.
In recent years, the chain has struggled, putting a strain on Dollar Tree’s acquisition of the company, resulting in more than 900 store closures last year alone.
In a statement announcing the shopping of the Family Dollar brand, Dollar Tree CEO Rick Dreiling said that the “unique needs” of the two brands have sent them in different directions, leading them to explore a split.
Dollar Tree is considered a suburban store with middle-income customers, while Family Dollar is located in more urban areas and caters to lower-income clientele.
With inflation driving prices and increased competition from retailers like Walmart and Dollar General, the company has struggled with operating costs.
Sales at Family Dollar stores open at least one year were up 0.1% last quarter.
The deal to acquire Family Dollar saw Dollar Tree shell out $8.5 billion in 2015. The company thought that the acquisition would help it compete against its rivals.
However, the match wasn’t made in heaven, as CNN reports that Family Dollar stores were in worse condition than Dollar Tree expected, and early strategies to boost sales fell short.
“Family Dollar’s sales have been sputtering, hurt by neglected stores, poor product selection, and unhappy workers,” The Wall Street Journal reported in 2018. Family Dollar “needs more work than the company originally thought.”
Even worse, this year, the Justice Department hit Family Dollar with a $41.6 million fine for violating product safety standards after it sold items stocked at a rat-infested warehouse.