Dollar Tree sold its Family Dollar business for approximately $1 billion to Brigade Capital Management and Macellum Capital Management, private equity firms. The discount store chain acquired Family Dollar for $9 billion in 2015 in an effort to compete with larger rivals, but failed to revive its sluggish sales. The two brands serve very different customers, according to The Wall Street Journal: Dollar Tree targets suburban consumers shopping for items such as party supplies, while Family Dollar sells everyday necessities in urban areas.
The Dollar Tree Case Study highlights the business strategies, challenges, and changes faced by this discount store chain. Some key points include the acquisition of Family Dollar, multi-level pricing strategies, and allegations of creating “food deserts.”
Dollar Tree is an American discount variety store chain that sells items for $1 or less. Headquartered in Chesapeake, Virginia, Dollar Tree is a Fortune 150 company and operates more than 15,000 stores in 48 US states and Canada. Its stores are supported by a national logistics network consisting of eleven distribution centers. The company operates $1 stores under the names Dollar Tree and Dollar Bills. It also operates a multi-price discount store chain under the Family Dollar brand, which was acquired by Dollar Tree in 2015.
Dollar Tree offers a wide selection of branded products at affordable prices, including health and beauty products, home decor, furniture, and everyday essentials. Many items in each store are priced at $1 or less, and most are priced under $10. Dollar Tree prides itself on offering the best value for trusted products in clean, well-organized stores, managed by friendly and community-focused employees.
Challenge
Recently, Dollar Tree ordered a custom e-commerce application, which required a series of four environments to host it.
The application needed a cloud-based architecture that could reliably support critical components, including pricing, taxes, order fulfillment, shipping, payment services, and API gateways. The application also required excellent performance and scalability.
The application requires a cloud-based architecture that can reliably support key components, including pricing, taxation, order fulfillment, shipping, payment services, and API gateways. It also requires excellent performance, full scalability, security, automation, redundancy, and high availability.
To create the new environment, Dollar Tree needed a vendor with a long history and proven track record of success in Amazon Web Services (AWS) projects. After conducting the necessary due diligence, the company turned to ClearScale.
ClearScale Solution
ClearScale designed and developed a four-environment solution for Dollar Tree, using a variety of AWS products.
After initial planning and project management, the team set up dependencies, including providing access to AWS, and enabled AWS Config to assess, audit, and evaluate AWS resource configurations. They also enabled AWS CloudTrail, which provides governance, compliance, operational auditing, and risk auditing of AWS accounts, as well as actions across the AWS infrastructure.
Finally, AWS Direct Connect, which connects data center networks to AWS Direct Connect locations via standard 1-gigabit or 10-gigabit Ethernet fiber optic cables, was verified.
Automation
Once the architecture was designed, automation was created to deploy all components on AWS. The team used Packer, an open source tool that creates identical machine images for multiple platforms from a single source configuration. In addition, they use Jenkins, a Continuous Integration (CI) server that builds application code and deploys it to the Elastic Beanstalk environment. For non-Beanstalk services, Jenkins integrates with Packer to create Amazon Machine Images (AMIs), which are then used to update auto-scaling groups.
Dollar Tree Case Study Summary
Acquisition of Family Dollar:
In 2015, Dollar Tree acquired Family Dollar, a strategic move to expand its reach and market share, but then sold it back in 2025 due to significant losses, according to a report from LinkedIn.
Multi-Level Pricing Strategy:
Dollar Tree, known for its fixed $1.25 price, began implementing a multi-level pricing strategy in some stores, offering items priced at $3, $5, and even $7.
“Food Desert” Allegations:
Dollar Tree and dollar stores in general have been accused of exacerbating the “food desert” issue by reducing access to healthy and affordable food in some areas, according to Wikipedia.
Business Strategy:
Dollar Tree successfully capitalized on consumer behavior during the economic recession by offering affordable products, according to a LinkedIn report.
Product Changes:
Dollar Tree continues to adjust its product mix to increase customer visits and attract more buyers.
Challenges:
Dollar Tree faces challenges related to health and safety, with allegations of violations and fines imposed by authorities.
Expansion:
Dollar Tree is expanding into new markets, including Canada, and investing in improved logistics and distribution.
Brand Change:
Dollar Tree is replacing the term “Diversity, Equity, and Inclusion” with “Membership Culture” to avoid controversy, according to Fox Business.
