Now more than ever, alternative formats like mass merchandisers, natural food retailers, dollar stores and even drugstores are encroaching on supermarket food sales. The following companies from the 2016 Top 75 list of U.S. and Canadian retailers represent the alternative formats with the most food sales.
Family Dollar Stores has agreed to be acquired by Dollar Tree for $74.50 per share, a 22.8% premium over Family Dollar’s closing price on Friday, both companies announced today.
The combined company will operates more than 13,000 stores in 48 states and five Canadian provinces, with sales exceeding $18 billion.
Dollar Tree, Chesapeake, Va., operates 5,080 stores in mostly suburban locations in 48 states and five Canadian provinces, with fixed price points of $1 or less; Family Dollar, Matthews, N.C., operates approximately 9,200 stores in urban and rural areas in 46 states aimed at low- and middle-income shoppers in urban and rural locations.
Dollar Tree said it will retain and grow each brand. It also said it expects to achieve an estimated $300 million in annual synergies within three years after the deal closes, including significant efficiencies in sourcing and procurement, SG&A leverage, distribution and logistics efficiency and format optimization.
It will also allow Dollar Tree to be better positioned to invest in new and existing markets, the company said.
The definitive agreement has been unanimously approved by the board of directors of both companies and is expected to close by early 2015, with Family Dollar shareholders receiving $59.60 per share in cash and the equivalent of $14.90 in Dollar Tree shares.
Family Dollar is adding more than 400 new food items to its grocery lineup.
“At Family Dollar our focus is on our customer,” said Jason Reiser, Family Dollar EVP and chief merchandising officer, in a statement. “It’s important for us to constantly evaluate our assortment, making sure that we have the products and national brands that are relevant to her and her family, always at a great everyday value.”
The chain is publicizing the expansion with a recipe challenge to make a meal for four for just $15, with a grand prize of cooking with television personality, best-selling author and chef Pat Neely in his Memphis, Tenn., home. Family Dollar is also sponsoring a special joint program with Feeding America aimed at giving children a healthy start to the day.
In addition, the retailer is lowering prices on 1,000 items from Kraft, Hellman’s Ragu and other brands.
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