Mar 7, 2019

Dollar Tree's misplaced bet on Family Dollar

Photo: Paul Hennessy/NurPhoto via Getty Images

Some 4 years ago, 2 discount retail kings — Dollar Tree and Dollar General — were fighting over who would absorb the third dollar store giant, Family Dollar. Dollar Tree won out.

Driving the news: But today, lagging sales at Family Dollar are actually dragging Dollar Tree down, reports the Wall Street Journal.

The big picture: As we've reported, discounters have long profited from the rise of income inequality in the U.S. And with a recession likely in the near future, the dollar store business will keep ballooning, Louis Hyman, a business historian at Cornell, tells Axios.

  • Still, Family Dollar has not been able to keep up. While Dollar Tree and Dollar General are sprucing up their shops and adding fresh produce options to lure customers, Family Dollar remains shabby.
  • Since Dollar Tree acquired the chain, its stock price has surged by 20% — a formidable jump but small compared to Dollar General's 50% increase in the same time period.
  • To tackle the gap, Dollar Tree is shuttering 400 Family Dollar stores and turning another 200 into Dollar Trees after renovations.

Be smart: For Dollar Tree, which owns 15,000 stores across the country, that's a drop in the bucket. But, to add context, 400 stores is almost equal to the total of the Whole Foods chain.

Go deeper: How dollar stores thrive in distressed pockets of rural America

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Sign of the times: A pro-Warren super PAC

Democratic presidential candidate Sen. Elizabeth Warren at a rally in Nevada. Photo: Alex Wong/Getty Images

A group of women progressives who back Sen. Elizabeth Warren has formed Persist PAC, a super PAC airing pro-Warren ads starting Wednesday in an effort to boost her performance ahead of Saturday's crucial Nevada caucuses, a spokesman told Axios.

Why it matters: Warren has spoken adamantly against the influence of unlimited spending and dark money in politics. But these supporters have concluded that before Warren can reform the system, she must win under the rules that exist — and that whether she likes it or not, their uncoordinated help may be needed to keep her viable through this weekend's contest and into South Carolina and Super Tuesday.

Go deeperArrowUpdated 51 mins ago - Politics & Policy

Pentagon policy chief resigns amid reported discord with Trump

John Rood. Photo: Mark Wilson/Getty Images

John Rood, the Pentagon's top policy official, will resign from his post at the end of the month, CNN first reported and President Trump confirmed.

The state of play: CNN said Rood "was perceived as not embracing some of the changes in policy the White House and senior Pentagon officials wanted," such as peace talks in Afghanistan with the Taliban and a decision to cut back on military exercises with South Korea as the president courted North Korea's Kim Jong-un.

Coronavirus cases rise, as warnings of global pandemic grow

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

We may be "at the brink" of a global pandemic, warns a top U.S. public health official, as cases continue to spread despite containment efforts. Meanwhile, the global economy is being affected, including the tech manufacturing industry.

The big picture: COVID-19 has now killed more than 2,000 people and infected over 75,000 others, mostly in mainland China, where the National Health Commission announced 136 new deaths since Tuesday.

Go deeperArrowUpdated 2 hours ago - Health