New Haven Register (New Haven, CT)
Hundreds of Family Dollar stores slated to close
Connecticut’s impact is unclear
Nine years after its sale to Dollar Tree, about 600 Family Dollar stores are slated to close in the next six months across its current base of nearly 16,800 nationally, with as many as 400 additional Family Dollar and Dollar Tree locations to shutter as their leases come up for renewal in the coming years.
In Connecticut, Family Dollar has locations in more than 30 municipalities, to include Bridgeport, Hartford, New Haven, Waterbury, Danbury, Manchester, Meriden and New London. Dollar Tree did not reveal immediately what locations it plans to close this year; the company has Dollar Tree locations in more than twodozen Connecticut cities and towns where it has a Family Dollar.
Dollar Tree and Family Dollar have 25,000 job openings nationally, with the company not ruling out the possibility that employees at affected stores might be able to get transfers to other nearby locations. Dollar Tree and Family Dollar have about 175 openings in Connecticut, with pay starting at $15.50 an hour for entry positions.
Rival Dollar General has stores in just over 70 Connecticut towns and cities, with a number of independent dollar retailers also having storefronts in Connecticut cities and downtown areas.
In response to a CT Insider query on Wednesday, a spokesperson emailed a response with the statement “Family Dollar and Dollar Tree stores are important to thousands of communities across this country. We owe it to those we serve to position all of our stores for success and meet the expectations of our valued customers and associates.”
Dollar Tree will offset the stores that are closing with at least 600 new stores across the Dollar Tree and Family Dollar brands, as it looks to replace “underperforming” stores in its words with new ones where it believes it can generate better foot traffic. In its annual report last year, Dollar Tree stated it anticipated the U.S. market could support 10,000 Dollar Tree stores and 15,000 Family Dollar locations.
In the past few years, the company has been opening “combo” stores with the logos of both brands. After raising prices to $1.25 in 2022, the company has since been offering some products at price points of $3 or more with strong results.
While customer traffic rose at a higher rate on average at Dollar Tree stores last year compared to Family Dollar, the company reported a drop in the average “ticket” per Dollar Tree customer, with Family Dollar seeing a slight increase. Family Dollar has been expanding its grocery options at stores nationally, putting it into direct competition with local supermarkets.
Dollar Tree announced its plans on Wednesday morning, after incurring a $1 billion loss in its 2023 fiscal year that ended this past January, largely due to the reduced value of the Family Dollar brand.
In a conference call with investment analysts, Dollar Tree CEO Rick Dreiling described Family Dollar as “a victim of the macro environment out there” but that he still views Family Dollar as a “powerful” brand.
“The Dollar Tree multiprice point strategy is doing significantly better than we thought it would do,” Dreiling said. “The customer acceptance has been off the charts, to be frank. Our biggest problem right now is getting enough merchandise into the stores fast enough so the consumer can respond.”
If the Family Dollar announcement came as a shock to some given Dollar Tree’s expansion pace, retail analyst Burt Flickinger called the move “long overdue” in his words for some of the chain’s struggling locations.
With Dollar Tree’s executive ranks including several leaders with supermarket experience, Flickinger added he expects the company to continue building out its options for packaged refrigerated foods and produce.
“With food deserts being so pervasive in Connecticut and other places, it’s been advantageous for the dollar stores to come into the market,” said Flickinger, managing director of Strategic Resource Group.
The company opened just over 640 stores in fiscal 2023, nearly evenly split between the Dollar Tree and Family Dollar brands. Over the preceding 12 months, Family Dollar dominated the company’s new openings with 333 stores, compared to 131 for Dollar Tree.