Cosmetic Industry and Safety Updates

Family Dollar and parent company Dollar General will pay $41.675 million in connection with a rodant-infested product warehouse in West Memphis, Ark. Food, drugs and cosmetics were among the products held in unsanitary conditions.

The companies entered a guilty plea to criminal charges and as a result, received the largest fine in a food safety case.

This week’s plea deal also requires Family Dollar and Dollar Tree to meet robust corporate compliance and reporting requirements for the next three years.

In February 2022 Family Dollar temporarily closed 404 stores served by the warehouse after the U.S. Food and Drug Administration (FDA) found a rodent infestation at the distribution center. The FDA said it acted after receiving a consumer complaint.

At the time, the FDA said it acted because it was concerned that some regulated products stored in the distribution center may have become contaminated and could pose a threat to the health and safety of the public. The FDA worked with the company to initiate a voluntary recall of the affected products that were shipped after Jan 1, 2022.

“When consumers go to the store, they have the right to expect that the food and drugs on the shelves have been kept in clean, uncontaminated conditions,” said Acting Associate Attorney General Benjamin Mizer. 

What the company knew, and when

According to the Justice Department, the company began receiving reports in August 2020 of mouse and pest issues with deliveries to stores. By the end of 2020, certain stores reported receiving rodents and rodent-damaged products from the warehouse. 

The company admitted that by no later than January 2021, some of its employees were aware that the unsanitary conditions caused FDA-regulated products held at the warehouse to become adulterated in violation of the Federal Food, Drug and Cosmetic Act (FDCA).

This isn’t Family Dollar’s first brush with the law. In 2019, Family Dollar, Dollar Tree and Dollar General agreed to pay a combined $1.2 million to the state of New York for selling products beyond their expiration dates.

The Justice Department did not say whether any of the $41 million will find its way to affected consumers. In December, Family Dollar settled a class action suit about the infestation and agreed to give affected customers a $25 gift card.

Target is continuing to expand its store-within-a-store concept with a new partnership with Ulta Beauty. The beauty retailer will begin selling its premium brands of cosmetics and fragrances in select Target stores starting next month.

The beauty shops will first roll out in more than 100 Target stores nationwide. The products will also be available online, with more than 50 specially curated prestige brands. The companies say they plan for these experiential “shop-in-shops” to ultimately have a presence in 800 Target locations in the U.S.

“Ulta Beauty at Target is unmatched in the industry, bringing guests the opportunity to discover new prestige brands while they shop Target’s incredible beauty assortment,” said Christina Hennington, executive vice president and chief growth officer at Target. “With two powerhouse retailers, our collective brand love, loyalty, and omnichannel expertise will inspire guests and raise the bar for the beauty shopping experience.” 

Disney at Target

Target has taken this approach in the past. Disney previously opened Walt Disney Stores in 25 Target locations just in time for the 2019 holiday shopping season.  The stores offered Target shoppers more than 450 items, including more than 100 products that previously could only be found at Disney’s stand-alone stores.

Target’s strategy appears to focus on turning its stores into a shopping experience that is similar to visiting a mall. Increasingly, a visit to a Target store also provides access to other popular brands.

In the case of Ulta Beauty, both retailers see it as a win-win. Target hopes the Ulta stores will attract new customers to its stores, while Ulta hopes to market to Target’s customer base.

Beauty expertise

In the shops, Ulta Beauty-trained team members will provide shoppers with beauty expertise and help them explore new products. Each “shop-in-shop” will be prominently placed near the existing Target beauty section and will feature specialized displays, discovery zones, and on-trend, seasonally relevant offerings.

Ulta Beauty operates nearly 1,200 stores in all 50 states. The company was founded in the early 1990s as Ulta Salon, Cosmetics and Fragrance, offering both high-end and drugstore cosmetics, skincare, and fragrances.

The company’s customer service gets mixed reviews at ConsumerAffairs, but Irene, of Eastvale, Calif., likes the product line and the fact that it’s available in one place.

“Their supply varies from inexpensive cosmetics to your higher-end supplies that you'd normally have to go to a department store to purchase,” she wrote in her review.