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Will Dollar Tree and Family Dollar create the new dollar-channel giant?

BY Michael Johnsen

Dollar Tree and Family Dollar last week announced an $8.5 billion merger that, when completed, will create the largest dollar store operator in the United States.
 
The store footprints of Dollar Tree and Family Dollar certainly complement one another. Dollar Tree stores are located primarily in suburban areas while Family Dollar targets urban and rural locations. Assuming that the new combined entity would not be forced to sell off an inordinate amount of stores to please trade regulators, that would make Dollar Tree/Family Dollar the new leader by store count.
 
Dollar Tree and Family Dollar currently have a combined 13,326 stores, and Dollar Tree averaged $1.6 million in revenues per store over the trailing 12 months, according to eMarketer research, down 1% year over year, while Family Dollar brought in an average of $1.3 million per store, down 4.8% over the trailing 12 months. 
 
Dollar General, with 11,338 stores, averaged $1.6 million in revenue per store in the trailing 12 months as well, up 2.3% year over year. Dollar Tree brought in $149 in sales per square foot over the trailing 12 months, down 0.9% in that time, according to eMarketer, while Family Dollar took in $150 per square foot, down 5% year over year. Dollar General averaged slightly higher sales per square foot — $179, up 1.5% — during that time frame. 
 
Combined, Dollar Tree and Family Dollar collected $18.4 billion in total revenues in the trailing 12 months. Dollar Tree's revenues were up 5.8% year over year, while Family Dollar's revenues grew just 3.3% during that time. The combined revenues of the two companies were just larger than Dollar General, which took in $17.8 billion in the trailing 12 months, up 8.8% year over year.
 
The marriage could mean sharper competition for Dollar General, still considered king of the dollar store hill. But it's important to consider the sharp growth trajectory at Dollar General. It continues to grow where it counts and its store continue to gain in productivity, in same-store sales growth, sales per sq. ft., and sheer store count. Dollar General will add in excess of 700 stores this years. Prior to the announcemet, Family Dollar had planned to add 525 stores this year; Dollar Tree had planned to add 375.
 
"First and foremost, Dollar General has clearly benefited from Family Dollar’s struggles over the past decade, particularly in 2012/2013 when the company retreated from its hybrid EDLP model," suggested Chuck Grom, Sterne Agee analyst. "With a new sheriff in town, Family Dollar will be a much sharper competitor going forward, creating margin pressure in the process."
 
DSN believes there is a lot of room for growth for both companies in the dollar channel. That's because the economy continues to make more of its core customer everyday. That doesn't seem to be changing any time soon, so look for massive growth from both companies in the years ahead, and stiffer competition for the low-income consumer — which, of course, has always been Walmart's domain.
 
 
 
 
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PuraMed BioScience to rebrand LipiGesic M

BY Michael Johnsen

SCHOFIELD, Wis. — PuraMed BioScience on Wednesday announced that the company is rebranding the LipiGesic M name along with the name's red and yellow logo, to be replaced with the trademarked name MigraPure going forward. The new name, logo, and color palette of PuraMed's homeopathic, natural migraine pain reliever will be reintroduced into selected segments of the retail marketplace.
 
"We've been working on this for over a year," stated Russell Mitchell, CEO and chairman of PuraMed BioScience. "We needed to secure the trademark for the name and create the image before we announced the development of the enhanced formula and our product line extensions," he said. "The new name will be easier for people to remember and pronounce. … We also believe the new look and color of the logo will convey our 'safe' and 'natural' message at a glance. Preliminary feedback about the change has been positive and we are pleased. We will now have packaging that reflects the excellent product inside."
 
PuraMed hopes to have the new product, which uses a flavor-enhanced version of the sublingual LipiGesic M formula, new packaging, new price point, and a new website ready for public purchase within the next two months, though promotion and distribution to retailers and targeted wholesale partners will begin earlier.
 
"The manufacturing order has been placed," said Mitchell. "Our marketing plan is being finalized and as soon as the packaging and the website are ready, we will launch."
 
MigraPure's fresh look and message will replace the red and yellow LipiGesic logo. A tagline that describes the product will also be a fundamental part of the logo.
 
"By using a tagline with the image, we can make a stronger statement and leave no doubt in the consumer's mind about what MigraPure is or what it does, which is also an improvement," said Mitchell. "During the re-launch, we will also reference LipiGesic M on the packaging and other marketing materials in order to maintain a connection with our clinical trial data and our current customer base."
 
Development of the gel, packaging and launch of the website are the first steps in the rebranding effort. PuraMed plans to continue to sell LipiGesic M under the old label until the new product is available.
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GNP opens annual meeting with education sessions highlighting CMS’ Star measures

BY Michael Johnsen

LAS VEGAS — Good Neighbor Pharmacy on Thursday reinforced its commitment to helping independent pharmacies enhance patient care by introducing programs focused on compliance and medication adherence. The first education sessions and initiatives took place today during the opening of ThoughtSpot 2014, Good Neighbor Pharmacy and AmerisourceBergen’s annual conference. Sessions around the Centers for Medicare and Medicaid Services Star Measures were a highlight and helped pharmacists understand that quality outcomes are a driving force in the new healthcare environment, and that pharmacists have a critical new role to play with CMS’s new rating system.
 
“There is a shift in healthcare today to place emphasis on outcomes and quality. One of the biggest drivers of change is the increased focus from CMS to pay more for quality and value-based patient care,” stated AJ Caffentzis, president, community and specialty pharmacy. “Independent pharmacies are uniquely positioned to excel in the new quality paradigm by leveraging their close ties with the communities they operate in and with the customers that seek advice and counsel. The personalized service already offered by community pharmacists can be a springboard to perform well in a system focused on adherence and compliance.”
 
This year’s CMS Star Measures education initiative culminated with a session led by Star Measures expert, community pharmacy owner and Good Neighbor Pharmacy member, Tripp Logan. The ThoughtSpot session was the last in a three-part educational series for AmerisourceBergen customers which began in January 2014. Throughout the series, pharmacists received education, tools and advice for how to view CMS Star Measures as a business opportunity and enhance patient outcomes. 
 
More than 70% of Good Neighbor Pharmacy Provider Network locations are helping health plans achieve three stars or better on adherence, according to data from EQuIPP, an innovative performance management platform.
 
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