The activist investor Mantle Ridge has taken a $1.8 billion stake in Dollar Tree and is focused on shoring up what the firm and others see as the company’s weak link — Family Dollar.

Mantle Ridge, according to The Wall Street Journal, is working with Rick Dreiling, the former CEO of Dollar General, as it sets out to get Dollar Tree’s board to make changes to the way Family Dollar operates its business.

Mr. Dreiling is familiar with Family Dollar, not only because he competed with the chain while at Dollar General but also because he sought to acquire the company for $9.7 billion in 2014. He was so intent on a merger of the two companies that he pledged to put off a planned retirement for a year to stay and create the “preeminent small-box retailer in the U.S.”

In the end, however, Dollar Tree won the contest for Family Dollar, despite making a lower bid than Dollar General. The analysis at the time was that federal regulators would see the merger of the top two dollar store chains as an antitrust violation. Mr. Dreiling and Dollar General had believed that the regulators would take a broader view of the competitive landscape and understand that the market included Walgreens, Walmart and many others.

Dollar Tree’s performance has been well below Dollar General in recent years, posting compound average sales growth of 5.3 percent going back to 2016, according to another Wall Street Journal report. Dollar General’s sales increased 11.3 percent over the same period.

Family Dollar has underperformed Dollar General in recent years with higher price points and lower profit margins than its main rival, the Journal, citing R5 Capital, reports.

The chain has sought to refresh its operations to drive sales and profits in recent years, including the rollout of H2 format stores, which have added Dollar Tree $1 merchandise sections, a larger party products assortment and also expanded freezer and cooler sections.

Family Dollar partnered with Instacart earlier this year to offer same-day delivery to customers, making it the first national dollar store chain to provide that service, and also became the first dollar store chain to launch its own ad network to support placements across its mobile app and FamilyDollar.com.



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