Company has not detailed how many employees will be affected by closures, relocations
Discount chain Family Dollar will be closing 1,000 stores as it continues to struggle financially.
The company will close roughly 600 Family Dollar stores in the first half of fiscal 2024, it said in a recent report.
Additionally, another 370 Family Dollar and 30 Dollar Tree stores will close over the next few years at the end of each store’s lease term.
The employer, however, did not specify which stores will be closed, and it did not detail the number of workers who will be affected by the closures.
According to data company ScrapeHero, there are 227 Dollar Tree stores in Canada as of Jan. 05, 2024. These stores are located in five provinces and territories and 146 cities.
Among provinces and territories, Ontario has the most Dollar Tree locations at 117 stores.
In the fourth quarter of fiscal 2023, the employer announced it is conducting a “comprehensive store portfolio optimization review which involved identifying stores for closure, relocation, or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors”.
In the last three months of 2023, Family Dollar incurred $594.4 million of charges in connection with the store portfolio review, according to the employer. It also incurred a goodwill impairment charge of $1.07 billion and a trade name intangible asset impairment charge of $950 million.
A shift in consumer spending to lower-margin essentials from higher-margin discretionary goods, as well as competition from rivals such as Walmart and Chinese e-commerce platform Temu, have caused Family Dollar’s struggles, according to a Global News report.
“Persistent inflation and reduced government benefits continue to pressure the lower-income consumers that comprise a sizable portion of Family Dollar’s customer base,” CEO Rick Dreiling said Wednesday on a call with analysts, according to a CNN report.
“Our biggest problem right now is getting enough merchandise into the stores fast enough so the consumer can respond,” said Dreilin in the Global News report, adding that Family Dollar was continuing to be hurt by macroeconomic uncertainties.
Aside from the business struggles, the company is also dealing with safety concerns among its workers.
Family Dollar, Dollar Tree, Dollar General and other discount stores have had longstanding theft issues. In a May 31, 2023 article, CNN reported that 49 people had been killed at Dollar General stores since 2014.
Dollar Tree employees have also complained about unsafe working conditions. In the U.S., the Occupational Safety and Health Administration (OSHA), last year, criticized the company for a “continued disregard for human safety” that “suggests the company thinks profits matter more than people,” according to CNN.
In 2022, the U.S. Department of Labor cited one of the nation’s largest discount retailers for workplace safety violations after it imposed $1.2 million in penalties following an inspection at its stores in Ohio.
Also, in 2023, the U.S. Equal Employment Opportunity Commission filed the first genetic information discrimination lawsuit of its fiscal year 2024, under the rarely used Genetic Information Non-Discrimination Act (GINA). Dolgencorp, LLC – operating as Dollar General – agreed to pay $1 million to keep the case out of the courts.
Also, in 2022, Dollar Tree has announced the exits of chief financial officer Kevin Wampler, chief legal officer and corporate secretary William Old, chief operating officer Thomas O’Boyle, chief strategy officer David Jacobs and chief information officer Andy Paisley.
The house cleaning is the result of a settlement with activist investor Mantle Ridge to revamp the board, Reuters reported. Under the settlement, the Chesapeake, VA-based company added seven new directors, including Dreiling and Mantle Ridge founder Paul Hilal.
