Family Dollar is testing a new, smaller store concept as it looks to expand in dense urban markets and accelerate growth following its separation from Dollar Tree.
The extreme discounter said it plans to pilot an “extra small box” format in 2026, with a broader rollout targeted from 2027 onwards.
The concept is designed to complement its existing footprint while improving access in high-density neighbourhoods where traditional store sizes are less viable.
The initiative forms part of Family Dollar’s first full-year strategy as an independent business, after its $1.01 billion sale in July 2025 to private equity firms Brigade Capital Management and Macellum Capital.
For 2025, the company reported:
- Revenue of approximately $13 billion
- Same-store sales growth of 2.5%
- EBITDA of $495 million, 24% above internal targets
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Family Dollar also closed underperforming stores and improved its balance sheet, ending the year with roughly $1 billion in liquidity, including cash and available credit.
CEO Duncan MacNaughton said the company has focused on simplifying operations and improving in-store execution as part of its turnaround.
Family Dollar expects EBITDA to grow by around 25% in fiscal 2026, driven by modest comp sales gains, working capital improvements and operational efficiencies.
As part of its longer-term plan, the retailer is targeting more than $1 billion in EBITDA.
The planned small-format stores are a key lever in that strategy, giving the company a more flexible real estate model to drive unit growth and better penetrate urban markets.
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