Dollar Tree to close ~1,000 stores, including Family Dollar stores

Struggling discount retailer Dollar Tree announced yesterday that it plans to close nearly 1,000 Family Dollar stores.

Why?
The decision is a response to missed sales and profit targets amid fierce competition from rivals Dollar General and online retailers like Temu and Shein.

Known for catering mainly to low-income urban dwellers, Family Dollar has suffered from years of mismanagement and deteriorating store conditions, including a recent $40 million fine for rat infestation in one of its warehouses.

High inflation and reduced government benefits, such as those from the Supplemental Nutrition Assistance Program (SNAP), have added to the challenges, said Dollar Tree CEO Rick Dreiling.

Approximately 12% of Family Dollar locations will close, with 600 stores shutting down in the first half of 2024. Dreiling noted these underperforming stores lost about $730 million yearly.

Other retailers, including Macy’s and Gap, are also streamlining operations by closing underperforming stores.