CHESAPEAKE, Va. — Dollar Tree said on Wednesday it was looking at options, including a potential sale or spinoff of its Family Dollar banner, as it looks to restructure business amid still-high inflation that continues to strain consumer spending.
The retailer has been grappling with weak discretionary demand as shoppers focus more on less-profitable consumables. It is facing stiff competition from rivals Walmart, Target and Chinese e-commerce platform Temu, which are also offering lower-priced products to attract budget-stretched Americans.
Family Dollar, which Dollar Tree bought in 2015, has been its main underperformer. Earlier this year, the company had outlined plans to shutter 970 of its Family Dollar stores.
“Many of these stores had been under-invested for years, and the capital investment required to fix them could not deliver an acceptable rate of return,” said CEO Richard Dreiling.
