In recent news, the 99 Cents Only stores have declared bankruptcy and announced plans to close all 370 locations in Texas, California, Nevada, and Arizona. This presents a significant opportunity for Dollar Tree to expand its reach and gain market share from the former 99 Cents Only customers.
Retail analyst Corey Tarlowe at Jeffries believes that the closures present an excellent opportunity for Dollar Tree to expand its customer base. He notes that many of the closing 99 Cents Only stores were located near existing Dollar Tree locations, making it easier for customers to transition to the new stores.
According to Earnest, a financial education platform, a large percentage of 99 Cents Only customers also shopped at Dollar Tree. This overlap in customer base suggests that Dollar Tree is well-positioned to capture the business of former 99 Cents Only shoppers.
David Naumann, a retail marketing manager at Verizon, points out that the lack of scale and market saturation were major factors contributing to the downfall of 99 Cents Only stores. With only 370 locations, the store chain struggled to compete with larger discount retailers like Dollar General and Dollar Tree, leading to higher procurement costs and lower profit margins.
