In the Matter of Dollar Tree, Inc. and Family Dollar Stores, Inc. #00006

Submission Number:
00006
Commenter:
Mark Abramovitz
State:
Minnesota
Initiative Name:
In the Matter of Dollar Tree, Inc. and Family Dollar Stores, Inc.
Matter Number:

141-0207

My comments, below, relate to: In the Matter of Dollar Tree, Inc. and Family Dollar Stores, Inc. File No. 141-0207 In the State of Minnesota, the Proposed Consent Order requires the divestiture of a total of six ("6") Family Dollar stores to Dollar Express: three ("3") in St. Paul; 3 in Minneapolis, and one ("1") in Robbinsdale, a first ring suburb of Minneapolis. The Minneapolis/St. Paul and suburban market is largest and most competitive in the State of Minnesota, with Dollar General, Dollar Tree and Family Dollar operating stores in and around the metropolitan area, with the preponderance of stores operated by Dollar Tree and Family Dollar. The combined population of Hennepin and Ramsey Counties of which Minneapolis and St. Paul are the county seats, respectively, is 1,725,714 (2013 data) and the combined area of these two counties according to the U.S. census Bureau is 777 square miles. The situation in smaller markets, such as the Brainerd Lakes area, comprised principally of Brainerd, Minnesota and Baxter, Minnesota, is vastly different. Crow Wing County of which Brainerd is county seat has total population 63,208 (2013 data) of which Brainerd has a population of 13,487 (2013 data) and Baxter has a population of 7,781 (2013 data). The next largest cities: Crosby; Breezy Point; Pequot Lakes; Crosslake; and, Nisswa each have populations of less than 3,000. The County occupies an area of 1,157 square miles according to the U.S. Census Bureau. In the Brainerd and Baxter marketplace, Dollar Tree operates two locations and Family Dollar operates one location. The Dollar Tree stores located at the Brainerd Mall, store no. 2413, and at the Westport Shopping Center, store no. 5584, are situated approximately 2.5 miles from one another. Further, the only Family Dollar Store in Brainerd/Baxter area, store no. 5792, is situated equidistant from each Dollar Tree location. There are only two other Dollar Tree locations within a 50 mile radius of Brainerd/Baxter: Little Falls, MN and Wadena, MN and only two other Family Dollar locations within a 25 miles radius of Brainerd/Baxter: Crosby, MN and Pequot Lakes, MN. The only non-Dollar Tree/Family Dollar competition comes from Dollar General with locations in Pequot Lakes, MN (18.3 miles from Brainerd); Staples, MN (27.8 miles from Brainerd); and Isle, MN (38.1 miles from Brainerd). Given the concentration of DollarTree/Family Dollar in Crow Wing County, and more specifically in the Brainerd/Baxter area, how will consumers be assured of a competitive marketplace without either a Dollar General or Dollar Express in operation? Without one or more competitors, there is no hindrance to Dollar Tree/Family Dollar from raising prices in the short- to medium-term and possibly closing locations in the medium- to long- term. Part of the logic of such an acquisition is cost-control, to be achieved through economies of scale, simplified and unified sourcing of products and ultimately through the closure of duplicative locations as leases come up for renewal. A priori it would appear that the Brainerd/Baxter marketplace would be one where consolidation would take place, unless Dollar Tree determines to not re-brand the Family Dollar location or re-brand it as a Dollar Tree Deals location. Otherwise, the Brainerd/Baxter marketplace simply cannot support three Dollar Tree stores in such close proximity, selling products at $1 or less. I urge the FTC to review its decision with respect to the competitive landscape in Crow Wing County in general, and in the Brainerd/Baxter area in particular. The FTC may wish to impose supplementary requirements on the Dollar Tree/Family Dollar merger transaction, including additional divestitures of Family Dollar locations to Dollar Express or requiring ancillary assurances from Dollar Tree that smaller communities will not be otherwise disadvantaged as a result of store closures, thus ensuring long-term, vigorous competition in the discount store market space.