Dollar Tree, US Foods Explore Portfolio Divestment

In a recent announcement, Dollar Tree disclosed its plans to evaluate “strategic alternatives” for its Family Dollar portfolio brand. Similarly, US Foods has also decided to explore options for its Chef’Store brand.

Dollar Tree mentioned that these alternatives could involve a potential sale, spin-off, or another form of disposition of the Family Dollar business. Rick Dreiling, the chairman and CEO of Dollar Tree, stated, “Dollar Tree has been on a multi-year journey to help the company fully achieve its potential.” He highlighted that the company had initiated a comprehensive review of the Family Dollar portfolio last year, which included the closure of approximately 970 underperforming Family Dollar stores. This move aimed to focus on enhancing investments in the remaining Family Dollar stores with promising growth opportunities and better returns on capital.

Furthermore, Dollar Tree aims to expand its Dollar Tree banner through various strategies such as new store openings, expanded multi-price offerings, and recent acquisitions like the purchase of 170 leases of 99 Cents Only stores in several states.

On the other hand, US Foods announced at its 2024 Investor Day the exploration of strategic alternatives for its Chef’Store business. The company stated that Chef’Store could benefit from focused investment under new ownership due to its lack of synergy with the overall portfolio. Despite this decision, US Foods plans to open five new Chef’Store locations in 2024, bringing the total number of stores to 96 across 14 states.

Both companies expressed their commitment to supporting the respective brands and ensuring a smooth transition during this process. The unique needs of each banner led to the decision to review strategic alternatives for the Family Dollar and Chef’Store businesses, respectively.