Discount shoppers will soon be left with one less option in the wake of a just-announced decision calling for the closing of nearly 1,000 Family Dollar locations nationally.
The Charlotte, North Carolina-based chain will see at least 600 of its stores closed by this summer, and another 370 locations in the months to come.
The announcement comes after parent company Dollar Tree released fourth quarter numbers showing a net loss of $1.7 billion, a particularly stark figure, considering that in the final quarter of 2022 Family Dollar posted net earnings of $452 million.
At the same time, according to the site Yahoo!Finance, Family Dollar foot traffic last month was only up by a marginal 0.5%, while Dollar Tree saw an increase of 8.3% and Dollar General was up by 8.4%.
Launched in 1959, Family Dollar, offering a wide variety of discounted items, experienced remarkable growth beginning in the 1970s. As of 2015, the chain had more than 8,000 stores nationally.
Also, during 2015, the chain was purchased by the even larger Dollar Tree Incorporated, which has its offices in Chesapeake, Virginia, and operates more than 16,700 stores.
Upon release of the latest quarter numbers, Rick Dreiling, chief executive officer of Dollar Tree, noted that overall numbers for the larger company were positive: “We finished the year strong, with fourth quarter results reflecting positive trends, market share gains, and adjusted margin improvement across both sectors.”
But while Dollar Tree posted a 6.3% gain in the most recent quarter, continued the company statement, Family Dollar was off by 1.2%.
In an earnings call, Dreiling referenced the Family Dollar closings by remarking: “We took a thoughtful and deliberate approach to address underperforming stores by considering each store’s performance, local operating environment, and our broader need for scale and operating efficiencies across the portfolio.”
Analysts say Family Dollar was hit by a confluence of changes in consumer habits after the Covid 19 outbreak, significantly increased theft rates, and a $42 million fine after the company was forced to close down a distribution center due to rat infestation.
Exactly which Family Dollar stores – which typically measure between 6,000 and 8,000 square feet – will close has not yet been announced. The company currently has around 30 locations each in Arizona, Colorado, and New Mexico.
By Garry Boulard
