Dollar Tree (NASDAQ:DLTR) plans to rebanner a handful of Family Dollar (NYSE:FDO) locations as soon as the acquisition of the company is completed this summer.
Dollar Tree officially reached an agreement to acquire rival discounter Family Dollar back in January for $8.5 billion.
The ultimate retail goal is to get the right banner in front of the right customer, according to Robert Sasser, president and CEO of Dollar Tree, reported Supermarket News.
Dollar Tree operates about 5,400 stores and Family Dollar operates about 8,000. An anticipated 330 Family Dollar locations will be divested upon the completion of the acquisition in early July.
The rebanner strategy will start with a small group of test stores to verify that the procedures are efficient and appropriate.
"We're going to closely track that, analyze it and, if necessary, modify processes for efficiency and then proceed to rebanner additional stores in waves," Sasser told Supermarket News.
The same test will be run at Dollar Tree locations to see if some would perform better with Family Dollar banners.
Sasser sees the combination of the two companies as a transformational opportunity. Although the two banners often exist in close proximity, they appeal to ostensibly different consumers. Dollar Tree aspires to reach a suburban customer while Family Dollar targets lower-income urban and rural consumers.
In addition, Sasser said that the company would be adding more freezers and coolers to about 320 more stores during 2015. Already at 3,700 Dollar Tree locations, frozen and refrigerated items are purchased more frequently and drive incremental sales across all categories.
-See this Supermarket News article
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