Dollar General Plans To Open Hundreds Of Stores After Failed Bid For Family Dollar

Like any recently scorned lover might do, Dollar General has an ambitious plan to better itself and make Family Dollar rue the day it rejected its $9 billion takeover bid in favor of Dollar Tree’s merger advances.

Forbes reports that Dollar General plans to open hundreds of new stores this year, with even more slated to open in 2016.

Dollar General’s determined expansion plan comes as a sign the company is gearing up for added competition from the newly merged Family Dollar and Dollar Tree companies.

By opening 730 new locations this year, Dollar General will have 12,519 stores in 40 states. However, that still falls below the combined approximately 13,000 stores operated by Dollar Tree and Family Dollar.

While Dollar Tree was ultimately named the victor of the dollar store war and won the heart of Family Dollar, had Dollar General been successful in landing the smaller store, it would likely have had to sell off nearly 4,000 stores.

The sordid dollar store love triangle began back in July when Dollar Tree made an $8.5 billion bid for North Carolina-based Family Dollar. Not one to feel left out, Dollar General proceeded to provide an unsolicited bid of $8.95 billion for the smaller chain.

But Family Dollar wasn’t feeling the love and rejected the Dollar General offer citing “significant antitrust issues” because the two chains have similar business models. Both Dollar General and Family Dollar sell items at different dollar price points, catering to low-income shoppers, while Dollar Tree caters to more middle-income shoppers and sells most items at $1.

Dollar General came back with a second bid of $9.1 billion and in an attempt to ease Family Dollars’ anti-trust review fears, it proposed closing 1,500 of the potentially combined-companies 20,000 stores.

Yet, that still wasn’t enough and Family Dollar rejected the bid, choosing instead to stay with its true love, Dollar Tree. Dollar General subsequently turned hostile, taking its big directly to shareholders in September.

The ordeal concluded in January when the shareholders for Family Dollar overwhelmingly voted in favor of a smaller, but safer, takeover bid from Dollar Tree, effectively crushing the heart of aggressive suitor Dollar General.

Dollar General Plans $1B Buyback, 730 New Stores This Year [Forbes]