Of all the dollar store chains, Family Dollar hasn’t always had the best reputation. Beginning this week, its owners are promising that’s going to change.
A coalition of private equity firms has announced the completion of a transaction announced earlier this year, in which Family Dollar has become a standalone company for the first time in a decade. And the new owners are pledging “a new Family Dollar” that’s better than before.
Dollar Tree had been the owner of Family Dollar since 2015, but struggled trying to figure out what to do with it. The company lavished attention on Dollar Tree, reinventing the chain by raising its base prices, adding more food, integrating more higher-ticket items into its aisles, even grafting Dollar Trees onto Family Dollars with the “combo store” format – all while Family Dollar itself languished.
So Dollar Tree finally unloaded the chain earlier this year, appearing happy to be rid of it. The new owners appear happy to be starting anew, allowing Family Dollar to succeed or fail on its own without a distracted or disinterested owner.
“Family Dollar is entering a new chapter – one that provides an incredible opportunity to invest in what matters most: our people, our stores, our customers, and our future,” Jonathan Duskin, CEO and Partner at new co-owner Macellum, said in a statement. “We are confident that with the strong, new leadership team, combined with a forward-looking strategic plan, we have a truly unique opportunity to reinvigorate the iconic Family Dollar brand.”
Family Dollar has more than 7,500 locations across the country. Many of them remain “combo stores,” sharing billing with Dollar Tree. But those will be uncoupled in the months ahead, with most of them reverting to Family Dollar only.
But what is the future of Family Dollar, exactly? Dollar Tree is seen as more of a suburban, “thrill of the hunt” type store, and Dollar General is seen as more of a rural general store – a smaller, more convenient version of a Walmart. But Family Dollar has long suffered from something of an identity crisis. Does it want to expand in small-town America like Dollar General, or lean into its urban locations? Does it want to offer a treasure hunt experience, where you never know what bargains you may find, or emphasize consistency, with a regular selection of everyday necessities?
The new owners are emphasizing Family Dollar’s roots as “neighborhood discount stores” that “serve the underserved.” “We’re energized by the opportunity to stand on our own and reimagine what value means for families across America,” Family Dollar’s new CEO Duncan MacNaughton said.
Improving and reinvigorating Family Dollar will take some time and investment, though. And while the new owners do have deep pockets, private equity owners are often better known for extracting value from new acquisitions than for pouring money into them. So Family Dollar shoppers and employees are likely to be watching hopefully, if not skeptically, in the months and years ahead to see whether the new owners will be able to make good on their promises.
For now, it’s all optimism. “We are building a new Family Dollar,” MacNaughton pledged, calling the change of ownership a “defining moment for Family Dollar — a chance to return to our roots, refocus on our unique strengths, and build a future tailored to the communities we proudly serve.”
After spending a billion dollars to acquire the chain, the new owners have their work cut out for them. Time will tell whether that investment pays off – for Family Dollar’s shoppers and owners alike.
Image source: jjbers 
No reason they can’t do both.
Have a selection of items that people are looking for regularly that they always stock and then have other items that are the “treasure hunt” aspect.
That would be very similar to what a chain like Aldi does (and there are others, like Ocean State Job Lot that do this as well).