VB investor

Dollar Tree et al: Four Retailers

Any guess why their CFO has not been replaced since quitting unexpectedly last Oct. I would think there are plenty of good financial people out there due to the banking/investment banks problems??

Dollar Tree et al: Four Retailers

Somehow Dollartree seems immune to rising costs in our economy. Granted certain things can be lessened and repacked to still make the $1.00 price point. However in light of energy costs alone Dollartree has to swallow these costs and somehow keep showing favorable margins. In addition they have had to drop many staple items that were both imported and bought domestically due to the price increases. For example they used to sell motor oil in the millions of units per year, now a qt. of motor oil costs wholesale more than $1.00 Remember that their imports are carried by ships in containers to their warehouses, then transported by trucks to their stores. With what has happened to diesel fuel, this alone has added significant costs to their freight.

Their deals stores seem to be doing OK, however there are less than 200 of them. Their highest retail price is $5.00 and as a whole represents well less than 10% of their total sales.

The big story is when they will have to get off of their $1.00 price point. It will be interesting to see how they fare when they get off of the horse that has brought them this far. When they become a multiple price retailer how are they going to differentiate themselves for the other long established discounters that have been dealing in this for years.

Dollar Tree et al: Four Retailers

Somehow Dollartree seems immune to rising costs in our economy. Granted certain things can be lessened and repacked to still make the $1.00 price point. However in light of energy costs alone Dollartree has to swallow these costs and somehow keep showing favorable margins. In addition they have had to drop many staple items that were both imported and bought domestically due to the price increases. For example they used to sell motor oil in the millions of units per year, now a qt. of motor oil costs wholesale more than $1.00 Remember that their imports are carried by ships in containers to their warehouses, then transported by trucks to their stores. With what has happened to diesel fuel, this alone has added significant costs to their freight.

Their deals stores seem to be doing OK, however there are less than 200 of them. Their highest retail price is $5.00 and as a whole represents well less than 10% of their total sales.

The big story is when they will have to get off of their $1.00 price point. It will be interesting to see how they fare when they get off of the horse that has brought them this far. When they become a multiple price retailer how are they going to differentiate themselves for the other long established discounters that have been dealing in this for years.