Editor’s Note: Out with the old, in with the new—that’s what they say, right?
While many in Hampton Roads are lamenting Norfolk Southern’s final decision to move to Atlanta, Dollar Tree is here to stay and is as strong of a company as it’s ever been!
Like most Fortune 500 companies, the story of Dollar Tree—one of Hampton Roads’ best entrepreneurial success stories—is grounded in humble roots. You can read all about its history in co-founder Macon Brock’s 2017 book titled One Buck at a Time: An Insider’s Account of How Dollar Tree Remade American Retail.
Although your business plan probably doesn’t indicate multi-billion dollar revenue figures 30+ years down the road, the story of Dollar Tree illustrates how big things can be achieved “one buck at a time.”
From Inside Business
If dollars grow on trees, then Dollar Tree seems to have unearthed the secret.
President and CEO Gary Philbin said sales in the third quarter increased 4.2 percent to $5.54 billion from $5.32 billion in the previous year’s third quarter.
“Dollar Tree delivered its 43rd consecutive quarter of same store sales growth with increases of both customer transactions and average ticket,” Philbin said. “We’re pleased with the performance of our newly renovated Family Dollar stores … we have begun the important phase of consolidating our store support centers into our Chesapeake campus which will improve our ability to support Family Dollar stores through enhanced collaboration, communication and teamwork.”
Philbin said Dollar Tree continues to have one of the most differentiated and defensible business models in the country.
Randy Guiler, Dollar Tree’s vice president of investor relations, said the company’s strength lies in its fixed price point of one dollar.
“We’re different than any other retailer out there,” Guiler said. “We have 50 percent consumable, 50 percent discretionary and our stores’ inventory changes each month.”
Guiler also pointed out that despite good or bad times, people still shop at Dollar Tree.
“For more than 30 years now everything has cost a dollar at Dollar Tree and during that time product cost, labor cost, transportation cost and real estate costs have all inflated, but we’ve been able to maintain the one dollar price point,” Guiler said. “When business costs increase, we keep the price and change the items.”
Top-selling items at the company’s stores are snacks and beverages, refrigerated and frozen products, and beauty and laundry care items.
During the third quarter, 127 new stores were opened – 87 Dollar Trees and 40 Family Dollars; 14 stores – 10 Dollar Trees and four Family Dollars – were relocated or expanded; 164 Family Dollar stores were renovated; and 30 former Family Dollar stores were rebranded to Dollar Tree stores.
Philbin also said 18 stores were closed – six Dollar Trees and 12 Family Dollars.
“We ended the quarter with 15,187 stores – 6,923 Dollar Trees and 8,264 Family Dollars,” he said.
Dollar Tree’s headquarters operations moved into a newly built 12-story, 510,000-square-foot office tower on Volvo Parkway in Chesapeake that will employ 1,900 once it’s fully operational. Plans for the Summit Pointe complex include upscale apartments, restaurants, retail and office space.
Guiler said there have not been any announcements at this point regarding the next phase of the development. The old portion of the headquarters’ building is still undergoing renovations.
“… in the process of consolidating our headquarters, associates from our Family Dollar business in Matthews, North Carolina, will be transitioning to the Chesapeake area during 2019,” Guiler said.
According to a story in the Charlotte Observer, many employees have decided not to relocate to Chesapeake after the planned closing of Family Dollar’s headquarters.
The story states 210 Family Dollar employees will make the move, while another 500 will not. Two hundred additional positions were eliminated.
“About 700 of the 900 roles will be filled here in Chesapeake and more than a third of the associates in Matthews that received offers are relocating,” Guiler said.
From Inside Business
By Sandra Pennecke
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