The parent company of Family Dollar said it would close approximately 1,000 stores, citing market conditions, store performance and other factors.
Dollar Tree, which has owned Family Dollar since 2015, said Wednesday that 600 Family Dollar stores would close in the first half of 2024, with another 370 locations closing over the next several years.
In addition, 30 Dollar Tree-branded stores will close over that time period.
The company currently oversees a total of 16,774 stores between the two brands.
Shares of Dollar Tree fell as much as 13% in Wednesday trading as the company also posted financial results that missed analysts’ expectations, including a net loss of more than $1.7 billion for the fourth quarter.
Amid higher costs throughout the economy, consumers have begun shifting to lower-margin goods compared with higher spending on discretionary items earlier in the post-pandemic period. That has challenged dollar stores’ profitability. Industry rival Dollar General has also faced similar issues.
Reuters has also reported that Chinese e-commerce platform Temu has also begun taking market share from dollar stores.
Additionally, dollar stores are facing an increase in theft, referred to as ‘shrink’ in the retail industry. Dollar Tree said shrink remains ‘elevated’ and would lower the company’s profitability going forward. On the company’s earnings call Wednesday, company executives said shrink had been accelerating.