Dive Brief:
- Dollar Tree announced plans to build a distribution center in Marietta, Oklahoma, nearly a year after a tornado destroyed a previous structure.
- The discount retailer expects the 1-million-square-foot facility to be operational by spring 2027, per an April 24 press release. The center will store and sort items to be delivered to 700 Dollar Tree stores in the West and Southwest.
- “This region and the Marietta community are critically important in our supply chain network and will be essential to our future growth,” said Mike Kindy, former EVP and chief supply chain officer of Dollar Tree, in the release.
Dive Insight:
Dollar Tree’s Marietta distribution center was leveled last April when a series of 22 tornadoes ripped through western and central Oklahoma, killing at least four people.
In response, the discount retailer “pivoted its network to deliver product to the approximately 600 Marietta-serviced Dollar Tree stores,” the company said in a release at the time.
However, the retailer continues to feel the impacts of losing the Marietta facility. In fiscal 2024, Dollar Tree incurred $124 million in losses related to damaged inventory, property and equipment. And prior to last week’s reopening announcement, CEO Michael Creedon said on a March 26 earnings call, “we will continue incurring additional stem mile and other related costs until a replacement is up and running.”
Dollar Tree has also faced distribution center capacity pressure elsewhere in its network, according to its most recent annual report published in March. Such pressure can negatively impact product availability, per the report.
To help alleviate the strain, the company said it plans to convert a Family Dollar distribution center in Odessa, Texas, into a Dollar Tree facility in the second quarter of fiscal 2025. The conversion will occur as Dollar Tree finalizes the sale of Family Dollar to private equity firms Brigade Capital Management and Macellum Capital Management during the quarter.
The Marietta facility and the to-be converted Odessa site will add to Dollar Tree’s current fleet of 15 distribution centers in the U.S., which will now be overseen by newly named Chief Supply Chain Officer Roxanne Weng. The former Walgreens chief supply chain officer took over the role this week from Kindy, who will retire.
In addition to growing its footprint and improving in-stock reliability, the retailer is also investing in upgrades to its current distribution centers to further optimize its network, aiming for all sites to be climate-controlled within the first six months of fiscal 2025, per the annual report.
Dollar Tree plans to implement similar climate-control capabilities as well as “a high level of mechanization, including high speed sortation” within its new Marietta facility when it opens.
