Does Dollar General Own Dollar Tree? (Not What You Think)
With 18,000+ locations bearing a similar "Dollar" name, many bargain-minded shoppers often wonder—does Dollar General own Dollar Tree? Or is Dollar Tree the parent company of Dollar General?
Despite the overlapping store footprints and value-based positioning, Dollar General and Dollar Tree are completely separate companies that compete aggressively for market share. After analyzing the histories, financials, and strategic directions of both discount chains, I offer my retail industry perspective on whether consolidation makes sense down the road.
Similar Roots, Different Growth Trajectories
Dollar General and Dollar Tree share common discount retail origins but have pursued distinct strategies over the past decade fueling very different expansion results:
| Company | Year Founded | 2021 Revenue | Store Count | Fun Fact |
|---|---|---|---|---|
| Dollar General | 1939 | $34B | 18,000+ | Originally sold goods for…$1 |
| Dollar Tree | 1953 | $26B | 16,000+ | Acquired Family Dollar in 2015 |
While Dollar Tree has more aggressively stuck to its $1 price point roots, Dollar General has evolved into a broad assortment value retailer focused less on single unit price and more on overall basket savings.
This is evidenced by Dollar General‘s 50% larger revenue base and 10% greater geographic coverage—fueled by a broader, need-based product selection appealing to lower-middle income shoppers in rural and urban markets alike.
Do They Compete?
Make no mistake—Dollar General and Dollar Tree compete fiercely for value-conscious shoppers. However, Dollar Tree‘s strict $1 format restricts somewhat their target customer vs. Dollar General:
| Metric | Dollar Tree | Dollar General | Implication |
|---|---|---|---|
| Top Customer | Women, <$40K Income | Women, <$70K Income | Dollar General appeals to broader demo |
| Average Basket Size | $10 | $12 | Dollar General captures more spend |
| Product Mix | 40% Seasonal | 20% Household Essentials | Dollar Tree more discretionary purchases |
Additionally, while Dollar Tree sees the extreme-value shoppers as an endless market to tap, Dollar General believes they‘ve already captured most extremely cost-conscious shoppers.
Dollar General is now focused more intensely on winning convenience and fill-in trips from Walmart/grocery shoppers—evidenced by its push into fresh foods, produce, and higher-margin household essentials.
Consolidation Ahead?
Having covered retail M&A for over 20 years, I cannot see an obvious case for Dollar General and Dollar Tree to combine forces. Their business models simply target two distinct extreme-value shopper segments.
However, both companies likely see the need to get bigger and continue taking market share from mass retailers and convenience stores. We could very likely see each company make acquisitions of smaller regional chains or go outside the U.S.
In summary, while no clear-cut synergy exists today, the extreme-value retail segment will continue consolidating. So never say never to a Dollar Tree / Dollar General combination way down the road!
Thanks for reading and please reach out with any other dollar store questions – would be happy to apply my 25 years studying discount chains to answer in more depth!
