Discount retailer Dollar Tree is planning to close nearly 1,000 stores across the United States in response to quarterly losses and changes in customer spending.
As part of a much-needed portfolio optimization, Dollar Tree executives announced on Wednesday that the company will shut down 600 stores in the first half of 2024. The closures will be split between its namesake chain and subsidiary Family Dollar, which it acquired for $8.5 billion in 2015. An additional 370 stores will close over the next several years as store leases expire.
“Our biggest problem right now is getting enough merchandise into the stores fast enough so the consumer can respond,” said CEO Rick Dreiling during a fourth-quarter earnings call.
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On Wednesday, the company also reported a net loss of $1.71 billion—$7.85 per share—for the quarter ending February 3rd.
In November, Dollar Tree announced a possible restructuring that involved shutting down underperforming Family Dollar stores. The company incurred a $594.4 million charge for a portfolio optimization review, as well as a goodwill impairment charge of $1.07 billion and an assessment impairment charge of $950 million.
Dollar stores in the US have reportedly been struggling in recent months as e-commerce platforms like Chinese app Temu have increased in popularity, offering cheaply made consumer goods for deeply discounted rates.
Family Dollar has also recently been plagued with health and safety concerns, including selling cinnamon powder contaminated with lead and storing items in rodent-infested warehouses. These lapses in cleanliness led to $41.7 million in fines from the Food & Drug Administration (FDA).
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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