In what looks like an attempt to increase its sales on its struggling stores, Dollar Tree is reportedly now going to add alcoholic drinks to over 1,000 of its Family Dollar outlets. The company revealed that it will be pushing to add the beverages as part of its strategy to improve its bottom line.
The Virginia-based chain of discount variety stores has been reporting disappointing sales figures over the past few quarters, which has led it to rethink its business strategy.
The company had previously announced that it would be closing more than 390 Family Dollar stores nationwide to cut its operating expenses. Most of the stores that would be closed will be shut down in the second quarter.
Dollar Tree originally acquired the Family Dollar brand in 2015. Since then, the company has been having problems gaining revenue from the acquisition, which had been dragging down its finances.
Over the past two years, the firm has been experiencing extremely low growth rates with same-store sales rising only 0.4 percent in 2017 and 0.1 percent in 2018. Its poor performance has prompted executives to consider an overhaul of its entire retail chain.
This week, the company announced that it would be renovating more than a 1,000 Family Dollar store outlets. 400 Family Dollar Stores would be getting new freezers and coolers that will contain various beverages, including alcoholic drinks. Some of the stores will also be rebranded as Dollar Tree stores and will be receiving an exterior and interior makeover.
Family Dollar stores continue to be a burden to the company's finances, but the overhaul of the various locations may prove to reverse that. Dollar Tree also revealed its plans to further expand the items being carried by the stores to include items above the customary $1 price point. The company will reportedly test out this strategy in more than 100 Dollar Tree locations to see if sales will increase.
Dollar Tree CEO Gary Philbin recently mentioned in a statement that the company still has a long way to go before it can turnaround the business.
The executive further stated that it will likely cost a lot of money to do so, but it should prove worthwhile given the benefits of synchronistic cost savings brought about by bringing together both brands. Philbin's statement was likely in response to the growing concerns amongst investors regarding the amount the company had paid for the acquisition.
Some of the company's strategies have been working so far. Sales at Family Dollar stores that were opened in the last 12 months have gained 1.9 percent. The company had also reportedly first-quarter net sales of around $5.81 billion; a 4.6 percent increase compared to the previous quarter.
