Family Dollar and Dollar Tree will close 1,000 stores

Family Dollar, the struggling discount chain that caters to low-income customers predominantly in cities, will close about 1,000 stores as inflation takes a bite out of consumers’ wallets and low-cost-retailers’ profits.

Family Dollar will close 600 locations in the first half of 2024 and 370 stores over the next several years as store leases expire.

Dollar Tree, which owns Family Dollar, also said it will close 30 stores as leases expire.

Dollar Tree bought Family Dollar in 2015 for $8.5 billion. The combined company hoped that by joining forces, it could grow its customer base, reduce costs and fend off bigger retailers like Dollar General and Walmart. But Dollar Tree has struggled to integrate Family Dollar.

Family Dollar stores were in poor condition when Dollar Tree acquired the business in 2015, analysts say. Although Family Dollar has renovated thousands of stores in recent years, many stores under both banners are still poorly maintained.

The dollar and discount segments of retail have become more competitive in recent years due to the shrinking middle class, inflation and retail store closures.

This is a developing story. It will be updated.