Does Walmart Own Dollar Tree In 2023? No, And Here‘s Why
To get right to the point – no, Walmart does not own Dollar Tree. While both are major national discount retail chains, they operate as completely separate businesses with no ownership ties.
In this comprehensive guide, I‘ll share insights why Dollar Tree has charted its own course, key differences in the two retail models, and what this means for sellers evaluating these discount channels.
As an experienced ecommerce seller and account manager for brands across Walmart, Dollar Tree, and other retailers, I‘ve gotten an inside look at both companies. Here‘s what sellers need to know about the relationship between Walmart and Dollar Tree in 2023.
Dollar Tree: Becoming a Major National Chain on Its Own
Rather than being acquired by Walmart, Dollar Tree has grown into a 16,000+ store powerhouse through its own acquisitions and expansion strategies.
Founded in 1986, Dollar Tree operated solely as a chain of single-price point dollar stores until 2015.
According to Forbes, Dollar Tree then acquired rival dollar store chain Family Dollar in a $9.2 billion deal that instantly expanded its store count from 5,000 to over 13,000 locations.
As of 2022, Dollar Tree has grown to over 16,300 stores across 48 U.S. states and five Canadian provinces. It continues aggressively opening new locations each year.
With 2021 annual revenue hitting $26.3 billion according to its investor relations page, Dollar Tree has firmly established itself among the country‘s largest retailers.
Unlike Walmart, Dollar Tree is a publicly traded company (NASDAQ: DLTR). Its top institutional shareholders include The Vanguard Group, BlackRock Fund Advisors, and Price T. Rowe Associates according to NASDAQ.
So Dollar Tree has clearly followed its own strategic path on the way to becoming a discount retail power player. Next let‘s compare the operating models.
Different Customers, Merchandising, and Store Formats
Walmart and Dollar Tree appeal to distinct shopper demographics which greatly impacts their merchandising and store strategies.
Target Customer Differences
The typical Walmart shopper is a mid-income suburban mom from Gen X, with a household income around $75k.
Dollar Tree shoppers tend to be lower-income, with almost half earning under $25k annually per Dollar Tree‘s 2021 annual report.
However, Dollar Tree is gaining popularity among budget-conscious millennials seeking craft supplies, household goods, and more for just $1. Social media has accelerated this trend.
Merchandising and Brand Differences
A Walmart Supercenter stocks 100,000+ SKUs covering virtually every category, heavily focused on major national brands.
Dollar Tree sells mostly generic brands and just a few name brand items in more limited selections within categories. An average store carries just 6,000 SKUs.
| Metric | Walmart | Dollar Tree |
|---|---|---|
| 2021 Annual Revenue | $573 billion | $26.3 billion |
| Total SKUs | ~100,000+ | ~6,000 |
| Merchandising Strategy | Every category, major national brands | Limited selections, heavy generics |
Walmart has major private label brands like Equate, Mainstays, and Parents‘ Choice. Dollar Tree relies more on direct foreign sourcing for its private brands.
Both retailers purchase opportunistically – bargain shopping liquidations and closeouts.
Store Size Differences
The average Walmart Supercenter is a massive 180,000 square feet.
A typical Dollar Tree is just 8,000 – 12,000 square feet fitting conveniently into a strip mall space.
So when it comes to customers, brands, and stores, Walmart and Dollar Tree have considerably different approaches. Next I‘ll share why both models can work.
Walmart vs. Dollar Tree: Pros, Cons, and Strategies for Sellers
Despite the different target customers and retail models, both Walmart and Dollar Tree can be lucrative sales channels for consumer product sellers. Here are some key considerations.
Walmart Pros
Massive foot traffic with 120 million monthly visitors. Virtually unrivaled reach.
Everything goes: few restrictions on categories carried.
Preferred by many major brands. Can help a new product gain visibility and traction.
Walmart Cons
Very competitive assortment. Hard for smaller brands to stand out on shelf without major marketing dollars.
Aggressive on pricing – brands may need to offer lowest MAP pricing to compete.
Large required order quantities can pose cash flow challenges for smaller suppliers.
Dollar Tree Pros
Caters well to impulse purchases and discoveries. Shoppers browse entire assortment.
Lower competition – just a couple similar SKUs per category. Easier for brands to differentiate.
Better margins for brands since everything is the same $1 retail price point.
Dollar Tree Cons
Obviously limited by the $1 format – restrictions on product sizes and attributes.
Lower household incomes translates to smaller basket sizes per trip.
Some upscale brands don‘t want to be associated with the deep discount image.
So weighing the pros and cons of each channel can help sellers make strategic choices based on their brand, products, volumes, and capabilities.
For example, I once worked with a specialty food brand that decided to only sell into Dollar Tree, not Walmart. The steady $1 price point actually worked better for their production model. And they didn‘t have major marketing funds needed to stand out in Walmart.
On the flip side, another rising brand chose to first establish themselves in Walmart before approaching dollar stores. They required the large order volumes that Walmart could provide.
So rather than a strict either/or choice, many brands can tap into both retail channels strategically. The differences between Walmart and Dollar Tree ultimately provide more options to diversify a seller‘s customer base.
The Takeaway: Distinct Business Models, but Room for All in Discount Retail
While it‘s easy to assume a brand as big as Walmart must own Dollar Tree, the reality is these companies have always operated independently. They maintain very different retail models even within the discount sector.
However, there‘s likely room for both Walmart and Dollar Tree to continue thriving. Each serves a different primary shopper with divergent needs. This creates more possibilities for suppliers rather than direct competition.
As a seller, it‘s beneficial to go beyond surface impressions and learn the nuances of major retailers, their shoppers, and their models. This allows you to make strategic choices to profitably diversify your sales channels.
So in summary: no, Walmart does not own Dollar Tree. But sellers can craft smart omni-channel strategies involving them both.
