Family Dollar has faced a series of challenges in recent years, despite being known as a chain of “neighborhood discount stores.” Dollar Tree acquired the struggling company in 2015 for $8.5 billion, a move that was seen as a lifeline by many. However, analysts like Neil Saunders and Joe Feldman have described the acquisition as a difficult one, with Dollar Tree still grappling with the issues inherited from Family Dollar.
One recent setback for Family Dollar was a $40 million fine imposed by the United States Justice Department for distributing items from a rat-infested warehouse, leading to the temporary closure of hundreds of stores. Now, CEO Rick Dreiling has announced plans to permanently close 1,000 stores due to various reasons, including an increase in shoplifting, rising inflation, and reduced SNAP benefits.
The closures are expected to impact customers, especially those in food deserts where dollar stores often serve as grocery stores. These closures come at a challenging time as food insecurity is on the rise, with millions of people experiencing food scarcity. People living in food deserts are more likely to face food insecurity due to limited access to affordable and healthy food options.
Dollar stores tend to thrive in low-income communities, where larger grocery stores have closed or avoided opening locations. While dollar stores have expanded to offer food items, they often lack fresh produce and nutritious options. The rise of dollar stores has raised concerns about the impact on local grocers and food access in communities.
Some cities, like Cleveland, have taken measures to restrict the growth of discount stores to protect local grocers. Dollar Tree has announced plans to close hundreds of Family Dollar locations, raising questions about the future of food security in these communities. The impact of these closures on food access and local economies remains to be seen.
