- Dollar Tree is considering selling Family Dollar almost a decade after acquiring it.
- Photos show one issue for the troubled chain: Products getting crushed in transit to stores.
- Dollar stores opened thousands of new stores in recent years but also faced operational issues.
Three times a week, a truck driver reports to a distribution center for Family Dollar in Florida and picks up a trailer full of products destined for one of the retailer's stores.
But before he shows up, products in the trailer are already crushed, covered in ants, or have gone soggy in the Florida humidity. Recent examples from the driver's deliveries include crushed jugs of laundry detergent that had leaked onto the trailer's floor and a bag of cheese balls that had burst, sending the snacks into the crannies between water bottles.
"Almost every single trailer that I've had, there's product damage," the truck driver told Business Insider. He asked not to be identified, citing potential retaliation at work. BI confirmed the driver's identity and employment.
Dollar Tree executives, who have managed Family Dollar since the company acquired it in 2015, have talked on earnings calls about the impact of high levels of "shrink" — products that have to be written off before they can be sold. The company has cited theft by patrons as a leading cause.
But photos from and an interview with the driver show another common form of loss that's much more within Family Dollar's control: Products that get damaged or go bad thanks to poor packing at distribution centers.
That could prove a challenge for Dollar Tree. It already unveiled a plan in March to close 1,000 Family Dollar stores — about 13% of the chain's locations.
Then, earlier this month, it went a step further and said that it was considering a sale of Family Dollar. Inefficient logistics and losses from damaged products — as well as theft — may represent a major challenge for any potential buyer trying to turn around the business.
The problems with damaged products start at Family Dollar's distribution center, the driver told BI.
There, workers often load trailers as quickly as possible, piling heavy items on top of sideways tubes of Pringles chips and precariously stacking packs of bottled water several layers high.
"They put a lot of heavy oils and Pepsi on top, and that tears the bags open," the driver said.
It's also common for the trailers to sit fully loaded at the distribution center for weeks before they make their way to a store, according to the driver. As they sit around, breakfast cereal, pies, and bags of sugar can break open, attracting ants, spiders, and other pests, he said.
"All that sugary stuff that gets opened, that's what draws the insects in."
What Family Dollar and Dollar Tree are doing about the damaged products is unclear.
The driver said he's been instructed to send photos — but no itemized list or other details — of damaged products to his boss. "I don't know what they do with these pictures," he said.
Dollar Tree did not respond to a request for comment from BI.
Meantime, the merchandise that makes it off the truck often ends up overwhelming the Family Dollar stores. Often, the stores don't have more than one employee on duty at a time, meaning the driver has to unload the truck — which contains tens of thousands of pounds of stuff — by himself.
And if the storage room in the back of the store isn't big enough, products end up blocking store aisles. At some dollar stores, including at rival chain Dollar General, the aisle clutter is so bad that it poses a fire safety risk, BI previously reported.
"All these little stores are getting way more merchandise than they can house," the driver said.
Do you work for Family Dollar, Dollar Tree, Dollar General, or another retailer and have a story idea to share? Reach out to this reporter at [email protected]
