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Dollar Tree is expanding into 99 cents only

On Wednesday, Dollar Tree revealed that it has purchased the leases for 170 99 Cents Only locations in Arizona, California, Nevada, and Texas after filing for bankruptcy. Starting in the fall, Dollar Tree will reopen these locations carrying its merchandise under its own name.

In April, 99 Cents Only declared bankruptcy and shut down all 370 of its shops.

The announcement indicates a trend of consolidation in the retail sector, notwithstanding the stark differences between the two businesses.

Grocery sales were offered by the local chain 99 Cents Only. Party supplies and household items are the company’s main offerings, and Dollar Tree is a nationwide chain with most of its stores located in suburbs. The last chain of dollar stores, Dollar Tree, offered everything for just $1 until 2021, when they started charging $1.25 and above.

Owned by Dollar Tree, Family Dollar is primarily located in urban areas. Family Dollar is closing 975 locations as a result of underperforming in comparison to other bargain chains including Dollar Tree in recent years.

Getting 99 Cents By allowing Dollar Tree to develop through leases instead of opening new locations, the Virginia-based firm is able to expand its presence on the West Coast at a lower cost.

According to Evercore IRI analyst Michael Montani, “management felt that these locations are fundamentally good and in relatively short supply, so they took advantage of competitor weakness,” in a note to clients on Wednesday.

The size of 99 Cents Only stores can be a problem for Dollar Tree.

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