Dollar Tree, US Foods Explore Portfolio Divestments

Dollar Tree revealed plans, Wednesday, to review “strategic alternatives” for its Family Dollar portfolio brand. US Foods’ also recently decided to do the same with its Chef’Store brand.

Dollar Tree noted that the alternatives could include a potential sale, spin-off, or other disposition of the Family Dollar business.

“Dollar Tree has been on a multi-year journey to help the company fully achieve its potential,” said Rick Dreiling, chairman and CEO of Dollar Tree, in a statement. “Last year, we announced a comprehensive review of the Family Dollar portfolio, including the planned closure of approximately 970 underperforming Family Dollar stores to focus on enhanced investments in remaining Family Dollar stores that present favorable opportunities for long-term growth and transformation, with more attractive returns on capital. We are already beginning to see progress in this targeted strategy in the streamlined Family Dollar banner.”

Dreiling added that the company will work to grow its Dollar Tree banner through new store openings, expanded multi-price offerings, and acquisition opportunities like the recent purchase of 170 leases of 99 Cents Only stores across Arizona, California, Nevada, and Texas.

“The unique needs of each banner at this time–transformation at Family Dollar and growth acceleration at Dollar Tree–lead us to the decision to conduct a thorough review of strategic alternatives for the Family Dollar business,” said Dreiling.

At US Foods’ 2024 Investor Day, the company revealed plans to explore strategic alternatives for its Chef’Store restaurant and kitchen supply store business.

During the presentation, the wholesale business noted that Chef’Store “would benefit from focused investment under new ownership” given its lack of synergy with its portfolio. Despite the recent announcement, the brand still expects to open five new Chef’Store locations in 2024, bringing the chain’s total to 96 locations across 14 states, said the company.

“We remain fully committed to supporting Chef’Store, our associates, and our customers during the process,” said US Foods in the presentation.