Quick Facts
- Family Dollar will pilot extra small store format in dense urban areas starting 2026, marking expansion into new market type
- Company reported $13 billion revenue and $495 million EBITDA in first full year as standalone business under private equity ownership
- New format designed to support unit growth in 2027 while complementing existing 7,500 store footprint
Family Dollar plans to test a new extra small store format in dense urban markets starting in 2026, the discount retailer announced Tuesday. The pilot program marks a strategic shift for the chain, which has traditionally operated in rural and suburban areas.
The Chesapeake, Virginia-based company did not specify how many stores would participate in the pilot or provide launch timing details. The new format is designed to complement Family Dollar’s existing 7,500 locations while targeting high-density neighborhoods.
“The new small-sized store is designed to complement the company’s existing store base while enhancing its ability to serve customers in high-density neighborhoods,” Family Dollar said in a press release.
The announcement came during Family Dollar’s fiscal 2025 earnings report, its first full year as a standalone company after being sold to Brigade Capital Management and Macellum Capital Management for $1 billion in July 2025.
Family Dollar reported approximately $13 billion in revenue for fiscal 2025, with comparable-sales growth of 2.5% and EBITDA of $495 million, exceeding internal budget by 24%. The company projects 25% EBITDA growth in fiscal 2026, targeting more than $1 billion as part of its multi-year plan.
“This is a defining moment for Family Dollar — a chance to return to our roots, refocus on our unique strengths, and build a future tailored to the communities we proudly serve,” said Duncan MacNaughton, chairman and CEO.
The retailer launched a “Value Creation” program involving about 70 initiatives across merchandising, store operations, supply chain and technology to support transformation efforts. Family Dollar also closed underperforming stores during the past fiscal year to optimize its fleet.
The company improved its balance sheet with total liquidity of approximately $1 billion at year-end and reduced net debt by $300 million since separation from Dollar Tree. Brigade and Macellum acquired Family Dollar after Dollar Tree purchased the chain for $8.5 billion more than a decade ago.
In November 2025, Family Dollar partnered with DoorDash for on-demand deliveries from approximately 7,000 stores nationwide.
Read more: Family Dollar to pilot extra small store format in urban markets
