Dollar Tree will introduce hundreds of private-label products
- Dollar Tree is expanding its efforts in grocery.
- The chain will add hundreds of private-label consumable goods this year.
- It will also add cooler doors in stores to offer more frozen and refrigerated foods.
Dollar Tree, the parent company of Family Dollar, is going all-in on its role as a grocer, planning to add hundreds of private-label products to its stores later this year.
During its fourth-quarter earnings call on March 1, Dollar Tree CEO Rick Dreiling, who assumed the role at the end of January, said the company planned to compete with more national brands by introducing hundreds of its own private-label products.
“Our shoppers rely on Family Dollar in their communities to provide these consumable base products to feed their families,” he told investors. “We are replacing our control brands with private brands, and we will be introducing hundreds of national brand-equivalent products in the back half of this year.”
The hundreds of new products will include both new labels and refined labels, he said. Dollar Tree is testing the products at a new test kitchen facility in Chesapeake, Virginia, where the chain is headquartered.
Dollar Tree has already expanded its frozen and refrigerated items at the $3, $4 and $5 price points, Dreiling said, increasing availability from zero stores to 3,500 stores last year. The products are arranged in coolers by price point, he said.
Additionally, Dreiling said Dollar Tree would expand the number of cooler doors in its stores, adding 16,000 this year with the goal of having 30 doors per store. This will increase space to accommodate more frozen and refrigerated items, the CEO said.
Both Dreiling and Jeff Davis, Dollar Tree’s chief financial officer, on the call said the strategy was part of Dollar Tree’s efforts to continue to widen the gap in price between it and drug, convenience and grocery stores.
Consumers have increasingly turned to dollar stores in search of better value in numerous categories, but especially grocery amid economic pressures and inflation, as Retail Leader Pro recently explained. According to Coresight Research, one in five shoppers in the U.S. buy groceries at a dollar store.
“Dollar stores provide consumers in retail deserts with expanded options at affordable prices, and at a time when the bifurcation of consumers’ socioeconomic status widens, they’re uniquely positioned to attract new buyers,” said Elizabeth Lafontaine, chief analyst for Retail Leader Pro.