Jan
29

How the Family Dollar-Dollar Tree Merger Affects Grocers

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Question mark made from dollar bills  isolated on white background.Dollar Tree Inc.’s acquisition of Family Dollar Stores Inc. could impact grocers as the merged company adds more food to its stores, an analyst said — but the effects on Publix Super Markets Inc. will likely be minimal.

Shareholders of Matthews-based Family Dollar (NSYE: FDO) approved the sale of the company to Virginia-based Dollar Tree (NASDAQ: DLTR) on Thursday morning. Dollar Tree operates nearly 5,100 stores in the United States and Canada. Most of those stores are in suburban markets and are as large as 10,000 square feet. It has agreed to close 1,500 stores to in order to gain Federal Trade Commission approval of the deal.

Family Dollar operates more than 8,200 stores in 46 states. Its stores are in a mix of urban and rural markets and measure between 7,500 square feet and 9,500 square feet.

The combined company could become a major player in food retail, said W. Frank Dell II, principal of Connecticut-based grocery consulting firm Dellmart & Co. And while that could spell doomsday for some grocers, it will likely be no issue for Lakeland, Fla.-based Publix.

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