Dive Brief:

• Family Dollar Stores Inc. saw sales slide in February as it prepared for its merger with Dollar Tree Inc., and reported Q2 net income of $76.7 million, down 18% from $90.9 million.

• Cold weather, which chilled February sales at many retailers in many parts of the country, and fees related to the merger contributed to the dip.

• As the Federal Trade Commission wraps up its review of the merger, Dollar Tree said earlier this week that it would have to close some 340 stores, in line with its early expectations, most or all of them Family Dollar stores. 

Dive Insight:

That Family Dollar had a bad February isn’t much cause for concern — many retailers did. The question for the newly merged Family Dollar-Dollar Tree company will be longer term: How will dollar stores compete in a newly thriving economy and against the likes of Target, Wal-Mart Stores, Costco, and Jet.com, which are all getting assertive about prices and creating smooth, channel-less operations?