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The Dollar Tree

The Dollar Tree. Brad Dowdy Elizabeth Cha Ryan Lancaster. Mission Statement.

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The Dollar Tree

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  1. The Dollar Tree Brad Dowdy Elizabeth Cha Ryan Lancaster

  2. Mission Statement • Dollar Tree Stores, Inc. is a customer-oriented, value driven variety store, operating at a one dollar price point. It will operate profitably, empower its associates to share in its opportunities, rewards and successes; and deal with others in an honest and considerate way. The company's mission will be consistent with controlled and profitable growth.

  3. Background Info. • Established in 1953 and headquarters in Chesapeake, VA. • Acquired numerous companies • 4 similar companies from 1996-2000 • As of Dec. 31, 2005: • #75 on top 100 businesses • Revenue: $3.3 billion (+8.6% from 2004) • # of stores: 2,914 • Stock price: $31.20 (DLTR/NYSE)

  4. Who & Why? • Low-Medium income households • Dollar Tree locations typically anchored next to mass merchandisers (ex: Walmart & Target) • Convenience • Variety of Merchandise • $1 price ceiling

  5. Product Category • Division 1 • Party Goods, Stationery, Gifts, Crafts/Notions • Division 2 • Fashion Accessories, Softlines, Floral, Valentine/Easter, Halloween, Thanksgiving/Fall Seasonal, Christmas, Baby, Books, Toys • Division 3 • Candy, Food, Health/Beauty Care • Division 4 • Household Consumables, Housewares, Pet Supplies, Electronics, and Hardware

  6. Types of stores • The Dollar Tree chooses three different store locations. • Large strip center or mall • Small strip center • Stand alone store

  7. What Do We Look For? • Regional centers, anchored by "big box" discounters or dominant grocery stores. • Freestanding locations in a strong retail corridor, with street presence and easy in/out and plenty of parking. • Shopping centers that are highly visible and have strong traffic counts. • Back door freight delivery, accessible by tractor-trailers

  8. Anchored by large discount or grocery store (25-33%) Inside a mall (18%) Freestanding or strip centers (about 50%) Dollar Tree employs Grid Layout in the Corvallis location Store Layout

  9. Strengths • Pricing of merchandise at $1.00 • Wide range of merchandise • Potential industry growth and square footage growth. • Corvallis • Located within a small strip center (other retailers to draw customers in) • Little direct competition

  10. Weaknesses • Customer Service • Quality and quantity • Poor product presentation • Lack of cleanliness • Corvallis • Above! • Location in relation to campus • Strip mall retail selection (run down strip aesthetics) • Poor signage

  11. Opportunities for the Dollar Tree • Relatively slow growth in U.S market, but stores that focus on discount merchandise will generally gain market share from independent more higher priced retailers. • Larger stores are seeking tighter inventory control. • Take advantage of manufacturers excess production capacity. • Corvallis • Students love anything cheap • Not much direct competition • Large and small strip centers available for retail space. • Sponsorships 

  12. Threats • Fixed price model limits power and gross margin enhancement. • Margins pressured by merchandise cost, labor and shipping expenses and energy increases. • Competition for super centers and other discount stores, including other “dollar stores” (ie Dollar Discount and Fred’s). • Corvallis • Kmart, Bi-Mart, Rite-Aid, Ross (volume and quality)

  13. Sources • http://www.stores.org/pdf/06%20JULY%201-100%20Chart.pdf • http://www.dollartree.com/ • http://mason.wm.edu/NR/rdonlyres/B269B202-3EBF-4F05-8AFA-88AFA9520E9C/0/Dollar_Tree_REPORT.pdf

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