Dollar Tree has not been the only chain of discount stores to contend with problems in 2024, but as its CEO departs, those issues may come to a head.
For starters, Family Dollar shuttered 1,000 stores. Then, the 99 Cents Only chain — with over 370 locations — closed completely. Meanwhile, Dollar General battled sluggish sales.
Back in 2015, Dollar Tree bought Family Dollar for $8.5 billion. Yet it has struggled to integrate the two company cultures. In June 2024, Dollar Tree revealed that it was considering putting Family Dollar up for sale.
Against that backdrop, Dollar Tree announced that it is now searching for a new CEO. That transition may inject further uncertainty into the discount sector.
Dollar Tree is ranked No. 181 in the Top 1000 Database, Digital Commerce 360’s ranking of North America’s largest online retailers. There, Digital Commerce 360 categorizes it as a Mass Merchant retailer. Digital Commerce 360 projects Dollar Tree’s online sales in 2024 will reach $555.19 million.
Dollar Tree web sales by year
Dollar Tree’s CEO exits
On Nov. 4, Dollar Tree announced that Rick Dreiling has stepped down from his position as chairman and chief executive officer, effective Nov. 3. Michael C. Creedon Jr., chief operating officer, has been appointed interim chief executive officer, while Edward (Ned) J. Kelly III, lead independent director, has been elected as Dollar Tree’s new chairman. In the meantime, the company’s board is conducting a search process to identify a permanent CEO, considering internal and external candidates.
Dreiling, who worked in leadership positions and ultimately led Dollar General for 14 years before moving to rival Dollar Tree, said he was stepping aside for unspecified health issues.
“With my health presenting some new challenges over the past two months, the time is right for me to step away and focus on myself and my family,” said Dreiling, who has been at the chain since 2022.
Creedon arrived at Dollar Tree after working for nine years at after-market car supply retailer Advance Auto Parts. He expressed optimism that it would be a seamless transition.
“Looking forward, we are well-prepared to help both banners reach their fullest potential,” Creedon said. “We are excited about our current trajectory and are focused on delivering a successful holiday season. We will continue accelerating growth at Dollar Tree and remain focused on identifying the best path forward for Family Dollar.”
Challenges facing Dollar Tree’s next CEO
Ellis Verdi, who is president and founder of the New York City-based ad agency DeVito/Verdi, as well as a former member of the National Retail Federation‘s marketing arm board, noted that Dollar Tree’s new CEO will inherit unresolved problems.
“All aspects of this retailer can use help,” Verdi said. “It’s not just fixing one thing.”
Verdi assessed that Dollar Tree and Family Dollar lack true value consistency, asking whether shoppers really see the stores as treasure hunts for assured low prices.
“The new CEO will need to focus on competing with Dollar General, but will also combat recent negative brand perception due to controversial practices in low-income communities,” Verdi stated.
Those perceptions may stem from issues such as creating food desserts and putting pressure on independent stores.
“Addressing this environment, the incoming CEO should prioritize improving Dollar Tree’s brand trust, enhancing product offerings, refining ecommerce and optimizing operations to differentiate from competitors,” Verdi said. He added that by focusing on customer loyalty and addressing these critical brand issues, Dollar Tree can strengthen its appeal in rural and underserved markets.
Verdi said the competition in the category is stronger than a decade ago, and the new CEO will have to confront the landscape. The new CEO, Verdi added, should focus on everyday value and a core group of needs (like a small Walmart), while baking deep discounts into the mix to push the interest.
“Value remains the most important reason to purchase,” Verdi said.
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