Dive Brief:
- Dollar Tree is providing rotacart deliveries to roughly 600 of its Family Dollar stores from its distribution center in Matthews, North Carolina, according to a Q4 2023 earnings call.
- By the end of the year, Dollar Tree expects more than 3,000 of its stores to receive rotacart deliveries from four Dollar Tree and two Family Dollar distribution centers, CEO Rick Dreiling said.
- The discount retailer is also testing rotacart deliveries to Dollar Tree stores from its distribution center in Chesapeake, Virginia, the CEO told analysts.
Dive Insight:
Dollar Tree has experienced a significant reduction in unloading times at its stores through its rotacart initiative, Dreiling noted in the earnings call. He added that unload times have been reduced to approximately one hour.
“Expanding and modernizing our trailer fleet is an important part of the rotacart initiative,” the CEO said. “To this end, we added nearly 900 new trailers with liftgates to the fleet in 2023 and expect to add 2,000 more this coming year.”
In December 2023, Dollar Tree announced it planned to roll out rotacarts as part of its streamlined delivery plan after testing the strategy as part of a larger effort to better its supply chain.
Enhancing its distribution network and operations is another aspect of Dollar Tree’s supply chain initiatives. According to Dreiling, Dollar Tree has implemented a new warehouse management system at one of its distribution centers while integrating a new transportation management and labor management system.
“Over time, we expect these enterprise-wide solutions to contribute to the optimization of our distribution network and labor efficiency,” he said.
Dollar Tree has also been investing in temperature controls as another method of improving distribution efficiency. By the end of the year, 25 of Dollar Tree’s distribution centers are expected to be fully temperature controlled or have a dedicated onsite temperature-controlled facility, Dreiling told analysts in March.
“Temperature-controlled DCs help reduce cross-docking costs and allow us to carry [over-the-counter] and other temperature-sensitive products throughout our distribution network,” he said.
Maintaining sufficient stock levels is also a focus for the retailer. Dollar Tree is working with its supplier partners to ensure that merchandise is received in a timely manner, CFO Jeff Davis said during the earnings call.
He added that Dollar Tree achieved significant inventory level improvements in 2023 compared to the previous year when the retailer experienced more supply chain disruptions.
“But I believe overall, the other actions that we're taking with respect to some of our systems to give us better visibility into where inventories lie and where our needs are across the network will allow us to further improve on our in-stock positions,” Davis said.
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