Dollar Tree plans to open 600 new stores and to renovate 1,250 Family Dollar stores in fiscal 2021, which runs through the end of January 2022. The new stores are expected to consist of 400 Dollar Tree stores and 200 Family Dollar stores; the latter group will be comprised of H2 and Combination Store formats, based upon market locations.
Bringing together both the Dollar Tree and Family Dollar brands, the Combination Store format is targeted for small towns and rural communities with populations of 3,000 to 4,000 — markets where the company would traditionally not open a Dollar Tree store alone. The company opened its first Combination Store in late 2019, followed by two additional test stores in early 2020. Between July 2020 and year’s end, the retailer opened 32 additional Combination Stores and is currently operating nearly 50 locations.
Compared to other Family Dollar stores located in small markets, these Combination Stores are delivering a same-store sales lift of greater than 20% on average, the company said in a release.
“We are extremely pleased with our customers’ response to the new Combination Store concept,” said Michael Witynski, President and CEO of Dollar Tree in a statement. “As I have said in the past, we will continue to refine our strategic store formats so that we are able to better serve customers, while improving store productivity, margins and returns.”.
Dollar Tree announced the plans while also reporting its Q4 results, including consolidated net sales that increased 7.2% to $6.77 billion. Enterprise same-store sales increased 4.9% on a constant currency basis, while same-store sales for Family Dollar increased 8.1% and Dollar Tree same-store sales increased 2.4%. Gross profit increased 9.8% to $2.15 billion in the quarter compared to the same period the previous prior year.