Family Dollar store closures are slated for around 370 locations, but the chain plans to add roughly the same number of new store locations, according to a report in the Portland Press Herald. Some might question why the large dollar store chain would make moves that leave them with roughly the same number of store outlets. The answer, it would appear, is location, location, location.
Family Dollar hasn’t divulged which locations will be closed, but store closings are expected to target underperforming stores. Location problems have been cited as one of the reasons for the chain’s falling profits. Other problems cited as reasons for disappointing sales figures included higher pricing than other dollar stores, a shift in focus from $1 items to seasonal promotions, the economy, cuts in food stamp benefits and even the long, harsh winter of 2013-2014.
While Family Dollar has announced plans to open 350-400 stores, this represents a considerable slowdown in the chain’s expansion. According to a report in the Virginia Gazette, Family Dollar had previously planned on opening around 500 stores in the coming year. They added 525 stores in fiscal 2014.
As an earlier Inquisitr article points out, Family Dollar is also planning on cutting jobs and lowering prices on many of their items in an attempt to reduce costs and increase sales.
A recent AP report suggests that Family Dollar isn’t the only economy-minded retail store suffering. A combination of particularly difficult economic times for people with lower incomes – the main customer base for Family Dollar and similar retailers – and competition from retail giant Wal-Mart are also affecting Dollar General and other dollar store merchandisers.
Regardless of where Family Dollar closes stores, people will be affected. Employees will be let go, left to collect unemployment or find other work in a tough employment market. This particularly affects the unskilled laborers that make up much of Family Dollar’s employee base. Lower income customers who depend on the low prices – many of whom lack the ability to travel to other locations – will also feel the loss of Family Dollar store locations in their area.
Of course, while it may be little comfort to displaced workers and customers disappointed to lose their local Family Dollar store, the new stores will come with new employment opportunities and the benefits of having an economy-minded store for the new locations.
What do you think? Could Family Dollar find other ways to improve their bottom line instead of closing a store down?