Dollar Tree, Inc. (DLTR): Planting This Tree Would Secure Your Portfolio

Even Family Dollar Stores and Dollar General have been able to give great returns, owing to their low prices and customers’ budget consciousness. Family Dollar has been growing largely through addition of new stores. It opened 35 new stores in February, which shows how the company has been benefitting from increased footfall of customers. It has also renovated its stores to attract more attention of customers.

Dollar Tree, Inc. (NASDAQ:DLTR) General offers a great variety of products for less than $10. It has been adding refrigerated products and various branded toys to lure customers. It has not only restructured its stores, but also plans to add more than 600 new stores this year. Given consumers’ interests in such stores selling merchandise at low prices, these stores might become recession proof.

However, Wal-Mart has not been up to the mark, with only 45% appreciation in its price. This is mainly because the company lost its customers to other discount stores during difficult times. Moreover, its cost structure was also heavy, since it operated large format stores. However, Wal-Mart has changed its strategy completely to win back lost customers.

It has started opening smaller neighborhood stores which drive higher traffic and are less costly. Also, it plans to provide huge discounts in order to keep pace with the other players in the industry.

Final thoughts

Though all the industry players look attractive, Dollar Tree, Inc. (NASDAQ:DLTR) has been exceptionally good. It has been expanding its presence, and plans to continue to do so with another 340 new stores in the current year. Its growing frozen products and e-commerce business will also help in the the future. Because of its low-priced products, the retailer’s market will continue to flourish.

This is not only because of the prevailing conditions, but also because of the fact that there is a vast section of the society which is price sensitive. Hence, owning this company will be a perfect investment at any point of time.

The article Planting This Tree Would Secure Your Portfolio originally appeared on Fool.com and is written by Himanshu Poddar.

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