Family Dollar, a discount variety store that markets brand-name products to lower-income customers in the U.S., announced this spring that it would be closing almost 1,000 stores across the country.
Six-hundred Family Dollar Stores are set to close in the first half of 2024, as well as about 370 additional Family Dollar and 30 Dollar Tree stores once their leases expire.
Family Dollar maintains stores across Texas, including 12 in Corpus Christi, according to the website. The company has not stated the impact that store closures would have on outlets in South Texas, but the news comes amidst continued customer woes of inflation and higher interest rates, with inflation at 3.4% in April of 2024, according to the April 2024 Consumer Price Index Report by J.P. Morgan.
"We have been on a multi-year journey to transform the organization and fully unlock its intrinsic value," said Dollar Tree Chairman and CEO Rick Dreiling in the March announcement. "Many of these stories had been underinvested in for years, and the capital investment required to fix them could not deliver an acceptable rate of return.
"Moving forward with a streamlined portfolio should help accelerate Family Dollar's transformation and improve the long-term returns of business," he added.
At the time, Dollar Tree reported fourth-quarter results showing a 1.2% drop in same-store net sales at Family Dollar stores, while Dollar Tree sales had risen 6.1%.
In a conference call last Wednesday, Dreiling gave first-quarters results showing that while same-store net sales at Dollar Tree rose 1.7%, same-store net sales at Family Dollar had risen just 0.1% in the period. He cited a softer Easter season, with dampened consumer demand for seasonal items, as well as related products including garden supplies and outdoor toys.
Dollar Tree suffered a $70 million loss in inventory and a $47 million loss in property and equipment due to a tornado that destroyed the Marietta Distribution Center in Marietta, Okla. in late April that will result in additional operating expenses, according to a news release from the company.
On May 29, the company announced that it had acquired 170 99 Cents Only Stores across Arizona, California, Nevada and Texas. The company, which filed for bankruptcy, has a distribution center in Katy. The decision is part of the company's growth strategy to expand its merchandise through retail markets and offer more items in addition to discount clothing, household items and personal care products, including fresh produce offered at a deep discount.
In March, the company shared news that it would begin offering $3, $4 and $5 frozen and refrigerated items at more than 6,500 Dollar Tree stores.
The chairman struck an optimistic tone on Wednesday as he discussed strategic alternatives that the company is taking through a multi-price point strategy and by accelerating new store openings.
Dollar Tree acquired Family Dollar in 2015. Family Dollar was originally a family-owned business that opened in 1959. The multi-price strategy, known as 'More Choices,' would bring the cost of up to 300 items that the store carries that are already above $1.25 up to $7 at about 3,000 stores by the year's end.
The multi-price items are being fully integrated into aisles throughout the store rather than concentrated in a single store aisle, Dreiling said, adding that even as the assortment is expanded, 85% of the items will stay at entry-level prices.
The June 5 news release stated that Dollar Tree had converted 926 Dollar Tree stores to in-line multi-price format, and that it was opening 116 new Dollar Tree and 41 new Family Dollar stores.
Dollar Tree, which operates 16,622 stores across 48 states and five Canadian provinces as of October 28, 2023, under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada, according to its website, has undergone continued scrutiny for its management and workplace safety practices.
Dollar Tree and Family Dollar reached a corporate-wide settlement with the U.S. Department of Labor last August to address hazards that existed at thousands of its stores resulting in Occupational Safety and Health Administration violations including blocked exits, access to fire extinguishers and electrical panels and improper storage of materials.
This is a developing story.
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