After more than four decades in business, discount retail chain 99 Cents Only will be shuttering all of its 371 stores across four states, citing unmanageable inflation and theft. The California-based company, which was once rated among the top value retailers in the Western United States, will now begin the process of liquidating its inventory, making it the latest staple business to buckle under ongoing “economic headwinds.”
According to company executives, the recent failure of 99 Cents Only can be traced back to a variety of factors, including lingering effects of the COVID lockdowns, as well as the struggling national economy and the explosion of retail theft.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” interim CEO Mike Simoncic said on Friday. “Unfortunately, the last several years have presented significant and lasting challenges in the retail environment, including the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures, and other macroeconomic headwinds, all of which have greatly hindered the Company’s ability to operate.”
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In industry terms, “shrink” refers to inventory lost to shoplifting, fraud, or administrative errors. In recent years, rates of retail theft—particularly in the form of “flash mob” robberies—have skyrocketed, costing major corporations millions of dollars per year. For example, in 2022, New York City retailers lost a combined total of $4.4 billion to theft, and similar trends were reflected in almost every major city in the country.
However, other factors also contributed to the decline of 99 Cents Only, most notably persistent inflation. February’s Consumer Price Index came in at 3.2 percent, and the Personal Consumption Expenditure Index (the Federal Reserve’s preferred metric that excludes volatile food and energy prices) rose year-over-year by 2.8 percent.
99 Cents Only is also not the only discount store to struggle with rising consumer costs. As Valuetainment previously reported, fellow retail chain Dollar Tree, as well as subsidiary Family Dollar, announced last month that it would close 1,000 stores nationwide after reporting a net loss of $1.71 billion in the last quarter.
After months of pursuing alternative solutions with its financial and legal advisers, the company concluded that “an orderly wind-down was necessary and the best way to maximize the value of 99 Cents Only Stores’ assets.”
Related: Criminals in Oakland, CA Drive Away Businesses, Leaving Residents Jobless
The store closures began immediately upon the announcement, with multiple locations liquidating or disposing of their inventory on Friday. The rest will be shut down in the coming months, but no official timeline has been provided.
“We deeply appreciate the dedicated employees, customers, partners, and communities who have collectively supported 99 Cents Only Stores for decades,” Simoncic added.
According to the Los Angeles Times, the company currently employs roughly 14,000 people in California, Nevada, Arizona, and Texas.
Connor Walcott is a staff writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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