Should Dollar General sweat its former CEO taking over at Dollar Tree?
Dollar Tree yesterday said that its executive chairman, Richard Dreiling, has been named CEO of the company. He replaces Mike Witnyski who has led the company since last year after serving in leadership positions with Dollar Tree going back to 2010.
Mr. Dreiling, who will move into the CEO role on January 29, was named executive chairman of the company last March. Notably, Mr. Dreiling in 2021 joined with Mantle Ridge, an activist investor, to push Dollar Tree’s leadership to improve the lagging performance of its Family Dollar chain.
Family Dollar was acquired by Dollar Tree after a bidding war with Dollar General, led at the time by Rick Dreiling. Mr. Dreiling, who served as CEO of Dollar General between 2008 and 2015, sought to acquire Family Dollar in 2014 for $9.7 billion. He even pledged at the time to put off a planned retirement to make the deal work.
Dollar Tree, in the end, acquired Family Dollar, despite making a lower bid than Dollar General. The analysis at the time was that federal regulators would see the merger of the top two dollar store chains as an antitrust violation. Mr. Dreiling and Dollar General had believed that the regulators would take a broader view of the competitive landscape and understand that the market included Walgreens, Walmart and many others.
The company has also focused on making Family Dollar more competitive with Dollar General and other rivals. Mr. Witnyski told analysts on Dollar Tree’s third quarter earnings call in November that the company had made “material price investments at Family Dollar” putting the chain at “price parity with key competitors and widen our spread to grocery and drugstores.”
Family Dollar reported a 4.1 percent gain in same-store sales during the third quarter seen as an early sign by the company that its price emphasis was working.
Mr. Witnyski said that traffic was up at the chain’s stores and sales of consumables “increased 4.7 percent on a comp basis despite the ticket headwinds related to our price actions in Q2. Shoppers are clearly recognizing the greater value and are responding to our enhanced advertising initiatives.”
- Rick Dreiling to Assume Role of Chairman and Chief Executive Officer of Dollar Tree, Inc. – Dollar Tree, Inc.
- Dollar Tree Announces Reconstitution of Board of Directors and New Executive Board Chair – Dollar Tree, Inc.
- Former Dollar General CEO may finally get his chance to fix what ails Family Dollar – RetailWire
- Dollar Tree Inc. (DLTR) Earnings Call Transcript – The Motley Fool
- Dollar Tree, Inc. Reports Results for the Third Quarter Fiscal 2022 – Dollar Tree, Inc.
- Dollar Tree, Inc. Announces New Leadership Positions as Part of the Company’s Transformation – Dollar Tree, Inc.
- Dollar Tree, Inc. Names Pedro Voyer as Chief Development Officer – Dollar Tree, Inc.
- Dollar Tree, Inc. Names Michael Creedon as Chief Operating Officer – Dollar Tree, Inc.
- Dollar Tree, Inc. Names Jeffrey A. Davis as Chief Financial Officer – Dollar Tree, Inc.
DISCUSSION QUESTIONS: What impact do you expect Rick Dreiling to have on Dollar Tree and Family Dollar? What will his appointment mean for Dollar General and other competitors to Dollar Tree?