Economic challenges force discount retailer to shrink its footprint in 2024

Dollar Tree, a leading discount retail chain, closed nearly 1000 stores in the coming year, including 600 Family Dollar locations, due to a combination of flagging sales and economic pressures. This decision represents about 15% of its Family Dollar stores, underscoring the challenges faced by the retailer amid rising inflation and its impact on the purchasing power of its predominantly low-income customer base.

The 1000 stores Dollar Tree closed are set to include an additional 370 Family Dollar stores and 30 Dollar Tree stores over the next few years as their leases expire. This move comes as the retail giant grapples with increasing incidences of shoplifting and a consumer trend towards price comparison shopping, which have further strained its operations.

Communities that have relied on these stores for affordable shopping options and local employment may feel the impact of these closures significantly. According to Dominick Miserandino of RetailWire, “They might be the only store that serves the entire community in this area…These communities are dependent on these stores.”

Dollar Tree, which expanded its portfolio by acquiring Family Dollar for over $8 billion nearly a decade ago, has yet to release a complete list of the specific locations slated for closure. Attempts to reach the company for comment have remained unanswered.

Among the known closures are two Family Dollar stores in Peoria, Illinois; a location in Humansville, Missouri; another in Willow Springs, Missouri; a store in Middletown, New Jersey; two locations in Wilmington, North Carolina; and two stores in Lynchburg, Virginia. These closures have been confirmed by local news reports, with signs and banners at the affected stores announcing the winding down of operations and offering significant discounts to clear out inventory.

As Dollar Tree and Family Dollar navigate these challenging economic waters, the effect of these closures on small communities, particularly those with limited shopping alternatives, underscores the broader impacts of inflation and market competition on both retailers and consumers.