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New York -- As analysts begin to speculate about the acquisition scenarios for Family Dollar – whether by Dollar Tree or Dollar General – one thing is clear: some store closures will occur.
According to a report by Wall Street Journal Online, a Dollar General takeover would close more stores than if Dollar Tree wins the bid. Dollar General said it is prepared to divest up to 700 of the combined company’s approximate 19,600 stores to satisfy antitrust regulators.
Nearly two-thirds of Dollar General’s 11,338 stores are within three miles of a Family Dollar store, according to commercial real estate data company CoStar Group, which could result in more closures than the anticipated 700.
“The prospect of closing more than just 700 stores is very real when you look at whether they will achieve higher sales or just be cannibalizing each other’s stores,” Suzanne Mulvee, a senior real estate strategist at CoStar, told WSJ.
The report went on to say that about a third of Dollar General stores are less than a mile from a Family Dollar store, but only about a quarter of Dollar Tree’s 4,891 stores are within a mile from a Family Dollar Store.