After A Year Of Staggering Earnings, Family Dollar Will Close Roughly 1000 Stores

The company announced it will close nearly 1000 stores over the next couple of years due to dismal earnings.

Erryn Howard Erryn Howard - Staff Writer •

family dollar
Shutterstock, Jonathan Weiss
A popular discount store is cutting its losses. Consumers can prepare to see fewer of the bargain dollar chain stores over the next couples of years. On Wednesday, both Family Dollar and Dollar Tree said it plans to close nearly 1,000 stores.

Family Dollar & Dollar Tree To Close

After a staggering loss in earnings, the company decided to cut its losses and to plan the closings of several stores. Specifically, Dollar Tree said it will close roughly 600 Family Dollar stores in the first half of fiscal 2024. Next, about 370 Family Dollar and 30 Dollar Tree stores will also close over the next several years as their leases expire. Unfortunately, the discount store chain lost $1.7 billion in the fourth quarter, down sharply from earnings of $452.2 million a year ago. Although revenue climbed to $8.6 billion, from $7.7 billion, it still fell short of Wall Street forecasts. In fact, Dollar Tree shares fell 14% at the opening bell Wednesday.
In response to the dismal quarter, Dollar Tree acquired Family Dollar for more than $8 billion almost a decade ago after a bidding war with rival Dollar General, but it has had difficulty absorbing the chain.

“This dramatic cull is the coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015,” reported Neil Saunders, managing director of GlobalData.

“Basically, almost ten years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around,” Saunders noted.

Saunders also reported that nearly 12% of current Family Dollar stores will be closing over the next three years.

Bargain Options Persist

In an economy struggling from inflation, many consumers seek bargain options. While the bargain chain will decrease in the number of stores, consumers still have bargain options. Wal-Mart remains the top brick-and-mortar retail and bargain store while Amazon easily dominates the online shopping market.

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