Last Updated on March 8, 2022
Two of the biggest dollar stores in America are Dollar General and Dollar Tree. You can’t go anywhere in America without running into at least one of them. Dollar General rules supreme in rural areas and also many urban areas, while Dollar Tree is especially popular in larger towns and bigger cities.
Some people might wonder if they’re connected in any way. Are Dollar General and Dollar Tree related? Or are they just competitors?
The short answer is that Dollar General and Dollar Tree are separate companies. They’re competitors, just like Walmart and Target, CVS and Walgreens, or AT&T and Verizon.
A Little Background:
Dollar Tree, founded in 1986, was first known as as Only $1.00. The co-founders of the store had operated other other retail stores in the past, but by the 1990s had honed in on dollar stores as a potential long-term road to profit. In 1991, the owners sold all of their other non-dollar stores, focusing in on the dollar store market. Then, in 1993, the company renamed itself Dollar Tree, just in case it might sell products for over a dollar. Two years after that, in 1995, the company went public, selling stock, and in the 1990s and 2000s bought out other, smaller dollar chains, turning them into Dollar Trees. And in 2015, Dollar Tree bought out Family Dollar.
Dollar General, meanwhile, was founded in the 1950s by a father and son. The pair had been running department stores since the 1930s but were intrigued at how effective dollar item promotions were in stores. Their first true dollar store launched in 1955, and while some items in the chain were more than a dollar, the name stuck. Dollar General grew rapidly, especially into rural areas where there was little or no competition, and in time it would become the largest dollar chain in America. The company started selling stock in 1968, briefly went private in 2007, and in 2009 started selling stock again.
While you could argue that the two companies are competitors, they also have different approaches that give them different customer bases. Dollar Tree is what is known as an extreme discounter, with everything costing the same low price. Until recently, that price was $1, but it is now $1.25. Dollar Tree markets itself heavily to people on a strict budget, and while you can find some of their stores in rural areas, they’re especially popular in larger towns and big cities.
Dollar General is more of a general store, providing a wide range of products at different and mostly low prices. Dollar General markets itself as a place where you can get a lot of basics. In rural America, DG may not have any competition for miles, so shoppers — including locals, visiting campers, and the like — there rely on it to get the important things they need, especially if they can’t or don’t want to drive farther to a bigger area. But Dollar General is a force in cities, too, especially because you can usually get in and out faster than a big box store.
While the two stores attack slightly different markets, they’re still competitors. In fact, the two battled in the 2010s over the right to buy Family Dollar, which at that point was ready to be purchased. Dollar General had the advantage of deeper pockets and made a higher bid, but Family Dollar ownership worried that the government might reject the purchase. Why? Because Dollar General and Family Dollar were so similar in how they operated that it might look like a monopoly or trust. Instead, Family Dollar took Dollar Tree’s bid, which was lower but more likely to happen. Dollar Tree completed its bid in 2015.
Both Dollar General and Dollar Tree continue to grow, adding new stores all the time. They’re doing it, though, as competitors, not as the same company.
