Tuesday, December 22, 2015

What the re-branding of Deals by Dollar Tree will mean for commercial corridors


We recently heard the news that Dollar Tree, the parent company of Family Dollar, will re-brand hundreds of its Deals stores into Dollar Trees or Family Dollar by next summer. At ICSC Deal Making early December, I spent a few minutes chatting with one Dollar Tree’s Real Estate Coordinators who confirmed the news: by the end of July 2016, Dollar Tree will convert 217 Deals stores into Dollar Tree Stores and five others into Family Dollar stores.

We have worked with a number of communities who have in recent years attracted a Deals store to their corridors, and they were all very happy with it. In many instances, the opening came through a lot of hard work to convince a national retailer to invest in low-income communities. In fact, the opening of a Deals store in many inner-city corridors signaled the retail potential that these communities have to offer and usually have had a catalytic effect by attracting other retailers to the area.

Deals stores sell a variety of discount items including toys, party supplies, seasonal items and home products at multi-price points. Dollar Tree sells everything for $1 or less, and Family Dollar sells a variety of items and national brands for $10 and under. Despite being a discount store, Deals has developed an image associated with affordable but quality products.  On the other hand, Dollar Tree and Family Dollar are usually perceived as downscale stores. I asked a commercial district manager here in New York what she thought about the change and she said: “No more 99 cents stores please!”

However, a recent look at Dollar Tree and Family Dollar stores reveals that both brands are working to improve their image and product selection, especially in their new and/or rebranded stores, which may surprise many shoppers coming in for the first time. The change from Deals to Dollar Tree or Family Dollar might also help older Deals stores (stores built 10 or more years ago) and that would benefit from the renovation and retrofitting that re-branding will bring.

So the change from Deals to Dollar Tree or Family Dollar might not be such bad news after all: its implications to commercial corridors, especially traditionally disinvested inner-city corridors, will depend on how the parent company does the retrofitting of stores (the attention to the façade and interiors) and whether the quality of products offered in the retrofitted stores match previous offerings from former Deals stores.

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