On March 13, 2024, NBC reported that Dollar Tree (which was bought by Family Dollar in 2015) decided to close 1000 Family Dollar Stores due to an unexpected loss in the fourth quarter (Ending February 3, 2023) earnings report. It is reported that 600 Family Dollar Stores will be closed in the first quarter of 2024, and 370 more stores will be closed as the years roll out.
Following this, there were reports on the closure of a few stores and notices to close stores in various states across the United States. For instance, cinncinati.com reported that 35 stores across Ohio will be closing and provided information about the closing of stores for the customer's convenience.
Dollar Tree acquired Family Dollar in 2015 for about $8.5 billion. Though the acquisition was intended to help Dollar Tree against its rivals, it is reported that there has been no significant improvement. Family Dollar and Dollar Tree provide people with multiple options for cheaper prices. During inflation and for low-income households, stores like these were considered a great help.
Reasons why Family Dollar Stores are closing
The first and primary reason for the closure is reported to be the unexpected loss in their earnings report.
According to a Reuters report, one reason for the company's reported loss is consumers switching to the Chinese platform Temu. The company also faces competition from other store chains like Walmart and Target. Some others reported people's belief that frequent shoplifting is also one reason Family Dollar Stores could not get the expected profits.
Meanwhile, CNN reported that issues like mismanagement have long plagued the company, and it was recently fined a whopping $40 million for selling products stored in a rat-infested warehouse.
CNN also mentions that the decision to reduce benefits for the Supplemental Nutrition Assistance Program, or SNAP, caused low-income families to have $250 less, so they had less to spend. According to reports, many other stores have also been impacted by the same.
People's reactions to the closings
Reports suggest that some people are very disappointed at the closure of Family Dollar Stores because these Stores made multiple goods not just accessible but also affordable. According to U.S. Sun reports, the closure of Family Dollar Stores in low-income areas has left people worried.
Let us also take a look at a few discussions that popped up on Twitter (now X) on the topic,
"They brag so when it collapses after his exit they will blame Trump. The current economy is propped up with toothpicks and it’s falling apart. 7/11 closed 450 stores, Jeep just laid off 1500 workers today. Dollar Tree closing stores as well as Family Dollar. It’s a disaster" said one user.
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"In my opinion they raised it 0.25 to help them with family dollar losses and that didn’t help the bleeding much they closed I think 600 family dollar stores… I wonder what next step… my opinion they should have converted them to Dollar Tree instead of closing" said another user.
Some of the Family Dollar stores that are closing soon also have discounts and sales.
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