Dollar Tree

Moat components and weights: cost advantage 45% weight, score 75; efficient scale 25% weight, score 65; intangible assets/brand and private label 15% weight, score 65; switching costs 10% weight, score 20; network effects 5% weight, score 0. Weighted result ≈64. Cost advantage stems from scale procurement (Greenbrier International sourcing), tight SKU curation, and a low-cost operating model that allows national brands and private labels at opening price points.

Efficient scale benefits exist locally where smaller-box formats fit convenient locations with fast trips. Intangibles include a widely recognized banner, seasonal merchandising know-how, and proprietary labels, but these are less durable than true consumer brands. Switching costs are minimal and network effects are absent.

The moat could strengthen as the multi-price 3.0 format broadens assortment and mark-on while keeping 85 percent of the basket at $2 or less; however, complexity, tariff exposure, and shrink can erode gains over time. Family Dollar’s sale removes a structural drag, improving focus on the core Dollar Tree banner.

Evidence: press releases and filings on 3.0 progress, pricing, and discontinued operations.