Insight Flash: Leverage Consumer Edge data to understand most likely Family Dollar store closures and how DG and FIVE may benefit

Dollar Tree Inc (DLTR), the company that owns discount retailers Dollar Tree and Family Dollar, recently announced plans to close roughly 1,000 Family Dollar stores nationwide over the coming years, including 600 closures this year. We analyze customer demographics and growth trends to predict which stores are most likely to close and how competitors such as Dollar General and Five Below can benefit from these closures.

Investors can leverage these insights to assess the potential upside of these closures for competitors, while retailers can gain visibility into how transaction data can positively impact strategy around store closures and openings.

Consumer Edge Data Analyzes Family Dollar Stores Most Likely to Close

Leveraging Consumer Edge data, we segment Family Dollar performance by store geography and customer income levels to inform which stores are most likely to close. We then uncover which competitors might be set to benefit from those closures. 

Family Dollar Locations with Higher Percentage of Low Income Shoppers

Stores located in areas with higher exposure to low-income shoppers could be most likely to close, as DLTR highlighted how lower SNAP benefits and stubbornly high inflation are pressuring spending among that group. Among the CSAs most dependent on shoppers earning less than $60k/year, Johnstown-Somerset (PA) and Macon-Bibb County-Warner Robins (GA) lead the pack with over 65% of Discount/Club revenue coming from shoppers earning less than $60,000.

Family Dollar Locations with Lowest Year Over Year Growth

Shifting to CSAs with the lowest spend growth in 2023, Williamsport-Lock Haven (PA) and Fort Wayne-Huntington-Auburn (IN) experienced the biggest decline in growth compared to 2022. The high decline suggests a potential justification for store closures, as underperformance in Family Dollar stores is a key consideration in DLTR’s recent store closure strategy. 

Markets Where Competitors Will Benefit from Family Dollar Closures

There are three CSAs that had a high percentage of spend coming from shoppers earning less than $60,000, and also experienced declining or slowing growth for Family Dollar in 2023. While Family Dollar may exit these areas, competitor Dollar General may be set to benefit the most, as it already has a presence in all three locations. Five Below may use the Family Dollar closures to expand its presence in the area despite its higher price point.

In the coming year, clients can continue to use CE data to see how the Family Dollar store closures may impact the dollar store industry’s fortunes. 

Consumer Edge is the leading provider of alternative data for consumer spending behavior, and the only provider of global revenue signals. If you’d like to benefit from using CE Transact US, CE Vision, or other products for discount club insights, market intelligence, and other industry data year-round to track trends and market hits like these, reach out to request a demo.

About the Authors

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

Harsh Masher is an Insights Analyst for the CEIC.