The Dollar Tree, which is now part of the Dollar General retail universe, bought the US chain of 7-Eleven convenience stores for a cool $8B. It was one of the bigger M&A deals in 2019.
The acquisition could be big for Speedway, which owns a chain of convenience stores across the US. It’s also worth noting that Dollar Tree is already the largest private label buyer of beverages in the country, with a 24% market share. So it already has a foot in the beverage market. Could combining these two businesses into one be the secret to success? Let’s take a closer look.
What Is The Dollar Tree?
Dollar Tree is one of the most popular dollar store chain in the US. It primarily sells cheap, generic household products and snacks at hugely discounted prices. It also sells health and wellness products at affordable prices. So if you’re looking to save a few dollars, Dollar Tree is the place to be. Since its founding in 1985, the company has grown to 12,300 stores in all US States, as well as in Puerto Rico and the US Virgin Islands. It is currently valued at around $12B.
Why Did Dollar Tree Buy Speedway?
There are a few potential reasons why Dollar Tree bought Speedway. First off, it could be trying to gain entry into the rapidly expanding gourmet coffee market, which was valued at $16.9B in 2019. Second, it could be looking to gain more shelf space for its own brand of household products. Finally, it could be trying to gain access to the fast-food market, which was valued at $17.2B in 2019.
Considering the size of the company and its current valuation, it’s hard to tell how successful Dollar Tree will be as a standalone business. But with a new CEO at the helm, there’s plenty of potential for growth.
Does This Mean A Change For Consumers?
It is always exciting when a large corporation makes an acquisition. Especially a corporation as large as Dollar Tree, which has the resources to scale the business quickly. This could have significant ramifications for consumers, especially considering the vast majority of stores are likely to be Dollar Trees. And whether you agree with their business model or not, the dollar discount store has become a vital part of many American communities.
The purchase of Speedway could mark a significant shift in the way we buy groceries as we know it. The convenience stores are often the only game in town for those living in smaller towns or far from the city. So this could lead to increased competition as well as new opportunities for consumers.
How Will This Affect My Favorite Coffee Brand?
If you’re a fan of J. Maffeis & Joe DiMaggio’s coffee brand, you might be concerned about the acquisition. As mentioned, Dollar Tree is already a significant player in the gourmet coffee industry, and this might give them enough power to crush your favorite coffee brand. They could outsource production to cheaper markets, undercook the beans to make them cheaper, or simply increase the price per cup – all because they can. We’ll have to wait and see what happens, but based on what we know now, this is definitely a cause for concern.
What About The Employees?
It’s always sad to see a company that was once a local treasure, now struggling financially. Especially when you consider many of the stores were established before the onset of the pandemic. So even before the world was affected by the COVID-19 pandemic, the convenience stores were already in a bit of a financial crisis. The COVID-19 pandemic only compounded the problem, as people wanted to help their local businesses and those who worked there. So stores took advantage of the situation, offering deeply discounted goods and services and job cuts to make up for lost revenue.
One of the things that makes Seven Eleven special is the way the company treats its employees. The small town atmosphere makes it feel more like a family-run business. And from what I’ve heard, the employees there like it that way. The company was founded in 1959 and is now headquartered in Concord, North Carolina. It currently has around 400 stores in 30 states, as well as in Canada, the UK, and Australia. So if you’re interested in a career in retail, this could be a great opportunity to break in to the industry. Or if you’re looking for some extra cash, you could consider applying for one of the many available jobs at Seven Eleven. It might not be the most glamorous of careers, but at least you’ll know you’re doing good for the community.
One More Thing
Speaking of community, it’s important to note that while many people will no doubt see this as a negative, it can also be a potentially positive thing. We are already seeing increased instances of people stepping up to help their local economy during these difficult times. And given the size and scope of the acquisition, it’s likely this will lead to more opportunities for those in the community who wish to get involved. Hopefully this won’t spell the end for small town America, but rather the beginning of a new era. It will be interesting to see how this plays out.