The tough times faced by major US dollar store chains, Family Dollar and 99 Cents Only, can be attributed to a combination of factors such as inflation, shoplifting, strategic mistakes, and underinvestment. Family Dollar, with around 8,000 stores, has struggled since being acquired by Dollar Tree in 2015, leading to numerous challenges and closures. Similarly, 99 Cents Only, located on the West Coast and Texas, has also faced issues due to missteps, including stores that were too large and inefficient to run.
The acquisition of Family Dollar by Dollar Tree was meant to help the latter compete against larger rivals, but it ultimately proved to be a costly mistake. Family Dollar was plagued by messy stores, high prices, and over-expansion, while 99 Cents Only struggled due to ineffective business models. Both chains have faced numerous challenges, leading to closures and bankruptcy filings.
Family Dollar and Dollar Tree failed to effectively integrate and manage the larger store base of Family Dollar, resulting in poor sales performance. Dollar Tree was ill-equipped to run Family Dollar stores, and early strategies to improve sales fell short. Family Dollar faced fines for product safety violations and poor store maintenance. Despite these setbacks, both companies are making efforts to improve, with Family Dollar lowering prices, adding private label brands, and investing in the supply chain.
99 Cents Only’s struggles stem back to its leveraged buyout in 2011, which left the company heavily indebted and unable to compete effectively in the retail market. The company introduced unsuccessful strategies such as raising shelf heights, leading to increased waste and losses. With competition from larger retailers and a focus on low-margin groceries, 99 Cents Only faced financial difficulties and was unable to invest in store improvements or digital strategies.
Both Family Dollar and 99 Cents Only have been impacted by the changing retail landscape, with challenges such as inflation, shoplifting, and pandemic-related disruptions further exacerbating their existing issues. Despite these setbacks, both chains are making efforts to turn things around, with new management teams, cost-cutting measures, and strategies to attract more customers. The future success of these dollar store chains will depend on their ability to adapt to changing market conditions and overcome the challenges they currently face.
