The discount chains Family Dollar and Dollar Tree announced this Wednesday that they will close more than 1,000 stores over the next few years. Both companies assured that they made this decision due to the rise in inflation. A fact that impacts the pockets of its clients and, consequently, brings them fewer benefits.
For this reason, both companies said Family Dollar will close around 1,000 establishments while Dollar Tree, owner of the first company, will also close 30 of its establishments when the time comes to renew their lease contracts.
However, the closure will not be immediate. As reported by Fox Business, Family Dollar will close the blinds on 600 of its stores during the first half of 2024 and another 370 stores in the coming years. For its part, the 30 Dollar Tree stores still do not have an exact closing date.
Dollar Tree's acquisition of Family Dollar
In 2015, Bloomberg recalls, Dollar Tree decided to acquire Family Dollar for $8.5 billion. With the merger, Dollar Tree managers hoped to increase their customer base, reduce costs and, especially, be able to compete with other large retailers such as Dollar General or Walmart.
But the merger did not go as expected. According to various analysts, the Family Dollar company was in a very bad financial state when Dollar Tree acquired it and, although, since then, the company has renovated hundreds of its stores, this solution has not served, in the long term, to recover the lost prestige.
In fact, CNN reported, Family Dollar had to face a $41.6 million fine for "violating product safety standards after selling items that were stocked in a rat-infested warehouse in West Memphis filled with live, dead and decaying rodents." One of the many problems that, together with the closure of establishments, caused Dollar Tree shares to drop 9.8% this Wednesday.
