Who will win the dollar store bidding war?

Stacey Vanek Smith Aug 18, 2014
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Dollar stores continue the bidding war over the purchase of Family Dollar stores. Brian Killian/Getty Images for Procter & Gamble

Who will win the dollar store bidding war?

Stacey Vanek Smith Aug 18, 2014
Dollar stores continue the bidding war over the purchase of Family Dollar stores. Brian Killian/Getty Images for Procter & Gamble
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Two dollar store chains are competing to buy a third, Family Dollar.

The retailer entertained an $8.5 billion merger deal with Dollar Tree last month, and Dollar General announced Monday it would pay a competitive $9.7 billion for the chain. While all of these discount stores are similar, they have several important differences.  

Here’s a look:

Dollar General

  • Size: Biggest of the three.
  • Products: lot of brand names, a mix of food and discretionary items like clothing and beauty products.
  • Placement in the Fortune 500: 164.
  • Locations: More than 11,500 locations in more than 40 states. Primarily in smaller towns, located in the southern and eastern U.S., as well as the Midwest and the Southwest.
  • Prices: About a fourth of their items are $1 or less.
  • How are they doing? Chain is thriving with $17.5 billion in revenue and $5.4 billion in profits.

Dollar Tree

  • Size: Smallest of the three.
  • Products: Mostly imported from China, focused on discretionary items like party supplies, beauty products, etc.
  • Placement in the Fortune 500: 342.
  • Locations: More than 5,000 locations in 48 states, mostly located in strip malls in small towns.
  • Prices: Most items cost $1 or less.
  • How are they doing? The chain is thriving and growing with $7.8 billion in revenue and $2.7 billion in profits.

The target of the bids: Family Dollar

  • Size: The takeover target, and second-largest of the three.
  • Products: A lot of brand names; focuses on food, also carries some linens and other products.
  • Placement in the Fortune 500: 271.
  • Locations: More than 8,200 stores in 45 states, mainly in urban and rural areas.
  • Prices: Most items are under $10.
  • How are they doing? Family Dollar has been struggling and closing stores. It tried raising prices and the plan back-fired. It has recently been closing stores. They have about $10.3 billion in revenue and $3.5 billion in profits.

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