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Family Dollar, the struggling discount chain that caters to low-income customers predominantly in cities, will close about 1,000 stores as inflation takes a bite out of consumers’ wallets and low-cost-retailers’ profits.
Family Dollar will close 600 locations in the first half of 2024 and 370 stores over the next several years as store leases expire.
Dollar Tree, which owns Family Dollar, also said it will close 30 stores as leases expire.
Dollar Tree bought Family Dollar in 2015 for $8.5 billion. The combined company hoped that by joining forces, it could grow its customer base, reduce costs and fend off bigger retailers like Dollar General and Walmart. But Dollar Tree has struggled to integrate Family Dollar.
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I was in a Family Dollar the other day.
how the fuck those prices catering to low-income?
It’s a trap. Many are in food deserts and are by far the easiest way to get food or essentials, the closest Walmart, target, grocery store, etc is too far, especially for those without a car.
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This is a great video on the food deserts and Dollar stores.
Wendover Productions - How Dollar Stores Quietly Consumed America
Smaller quantities at higher prices per unit.
Bulk stores like Costco are cheapest, but buying in bulk has upfront expenses.
If you buy at dollar tree it’s a smaller price, but a higher price overtime.
So once you start, people get trapped.
Family Dollar is entirely owned by Dollar Tree, they are one entity. It’s just Dollar Tree and Dollar General now. These corporations have leeched off of small under served towns for a while now. Hopefully real competitors like Aldi can help. Another event added to the list of recession indicators. Small towns in America are disappearing.
The reasons they gave for closing stores was bullshit. The purchase of family dollar was a leveraged buyout.
https://www.macrotrends.net/stocks/charts/DLTR/dollar-tree/debt-equity-ratio
It’s the same old story. A company is sold under a leverage buyout. In order to service the debt the new owners shit on everything that made the old company successful. A few years later sales tank and profitability falls below their ability to repay the debt.
So they start cutting costs and liquidation assets to pay of the debt load. Eventually it ends in insolvency. The lenders and executive team make off with huge gains while the company and common stock holders get fucked.
As is tradition in late-stage capitalism.
Came to share that. It’s such a good exposé.
Management refused to hire enough people and told workers to fend for themselves. Even after a robbery, the only response was when the store would reopen. Fucking ghouls.
Turns out, you can’t just pay people $1.
Who knew?
Yes, yes we understand human lives will be disrupted, employees sacrificed, we got it - no problems there since it’s business as usual and the machinery of capitalism is fueled by the blood of the working class. But we have demands of the CEO!
What about the rats? Where will they go? Won’t somebody please think of the rats?!
You’d think inflation would mean people shop at low cost places. During the great recession Dollarama took off. More likely they had bad management.
Except the prices per unit at these places are often actually higher for the same goods than at other retailers. They just sell them in smaller quantities. Or they sell objectively lower quality products at similar prices.
Sounds like bad management.
Bad business model
Cheap products at cheap prices is a fine business model. Failure to properly execute on that is bad management.
You misunderstand. I’m saying none of their stuff is sold at cheap prices. They both sell the same name brand products at higher prices per unit than competitors (just in smaller quantities), and lesser quality products at the same prices as the name brand products elsewhere. They sell cheap stuff at normal prices and normal stuff at inflated prices. They just sell them in smaller packages so the shelf price is lower, but so is what you get for that price. Instead of buying 1000 paper towel sheets for 4 dollars (250 sheets/$) they’ll sell a roll of the 600 paper towel sheets for 3 dollars (200 sheets/$) for the same brand. Yes, you only paid $3 instead of $4, but you also got less for your money.
Dollar stores take advantage of two things, 1) the average person being bad at math (or at least not doing unit math when they shop) and 2) they put their stores in areas with few other options and edge out competitors until there are no other options for people in those areas. They attract the poorest trying to save a buck, and then milk them for their money. And they both understaffed their stores and underpay their employees because people don’t have any other choice in many places these stores exists. They have a chokehold on rural areas, particularly in the south. The most amazing part of this story for me is that they are closing any stores because they are famously EVERYWHERE. They breed like rabbits. But they are terrible businesses for the consumer and they shouldn’t exist, imo.
I understand that they are not cheap prices. That means they have failed in execution. And horribly so if they have to close stores.
Dollar General has been dominating the dollar store wars
Well some cities have like 5 family dollar stores…
