In a conversation with analysts on Thursday, Dollar Tree’s CEO Richard Dreiling revealed that the company is preparing to implement new strategies in the latter half of the year to address “shrinkage,” which refers to inventory loss caused by theft and other factors.
Dreiling emphasized a more defensive approach to tackling shrinkage, acknowledging that the extent of inventory losses had surpassed their initial projections.
Both Dollar Tree and Family Dollar, subsidiaries of Dollar Tree Inc., will be repositioning some products near the checkout area and taking steps to secure others. However, if maintaining inventory on the shelves proves challenging, certain products might be discontinued altogether.
The company’s gross profit margins have seen a decline from 32.7 percent in the second quarter of 2022 to 29.8 percent in the second quarter of 2023. Dollar Tree’s CFO Jeffrey Davis attributed this decline primarily to the impact of inventory losses.
Dollar Tree’s move to safeguard products due to increasing theft concerns follows in the footsteps of other retailers such as Walmart, CVS, Walgreens, Rite Aid, and Target, which have also adopted similar measures.
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Digest Pulse journalist was involved in the writing and production of this article.
