Dollar Tree stepping up its fight for penny-pinching customers. On Monday, the discounter said it would acquire rival discounter Family Dollar for $8.5 billion, making it the biggest player in the dollar store category. The acquisition comes as Wal-Mart Stores Inc. is going after lower-income customers with smaller stores. Despite their names, Dollar Store and Family Dollar vary in their business models.
Primarily, the deal gives Dollar Tree greater diversity in pricing and product mix. Here's a snapshot of the two chains:
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— Founded in 1986.
— About 5,000 locations.
— True to its name, everything in the store costs a buck.
— About half of the products are "consumables," or cereal, potato chips and sodas.
— Stores are about 8,000 to 10,000 square feet and concentrated in suburban areas.
— Target customer is a "broad range of middle America."
— Founded in 1959.
— About 8,000 locations.
— Prices vary, with only 13 percent of sales coming from items that cost $1 or less. Most items are less than $10.
— About 72 percent of products are consumables, 10 percent home products, 10 percent seasonal & electronics and 8 percent apparel and accessories.
— Stores are about 7,500 to 9,500 square feet, with a concentration in urban and rural areas.
— Target customer is "low- to lower middle-income."
Source: Dollar Tree