Nearly 1,000 Family Dollar stores closing as Dollar Tree announces shutdown

Dollar Tree plans to close 600 Family Dollar stores in 2024, with additional closures over the next few years.

In the fourth quarter of 2023, Dollar Tree conducted a thorough review of its store performance to determine which locations to close, relocate, or re-banner. The company announced plans to close approximately 600 Family Dollar stores in the first half of fiscal 2024. Additionally, around 370 Family Dollar and 30 Dollar Tree stores will close over the next several years as each store's lease expires.

Chairman and CEO Rick Dreiling expressed satisfaction with the positive traffic trends, market share gains, and improved margins in the fourth quarter of the year. He acknowledged that the company is still in the early stages of its transformation journey but is optimistic about future growth opportunities. Dollar Tree is focused on accelerating its multi-price rollout and implementing strategies to enhance profitability and unlock value at Family Dollar in 2024.

The specific locations of the store closures have not been disclosed by Dollar Tree, and it is unclear when the closures will begin or which states will be affected. CEO Bob Sasser described the decision as a transformative opportunity for the business to offer a wider range of merchandise assortments at greater value to a broader customer base.

As of February 3, Dollar Tree operated 16,774 stores across 48 states and five Canadian provinces under the brands Dollar Tree, Family Dollar, and Dollar Tree Canada. This recent announcement comes amidst a series of challenges for the discount chain, including a record fine of $41.6 million for storing FDA-regulated products in unsanitary conditions in a rat-infested warehouse in Arkansas.

In February, Family Dollar Stores agreed to pay the hefty fine after being charged with debasing FDA-regulated products by storing them in unsanitary conditions. The company admitted to shipping products from its Arkansas distribution center until January 2022, despite evidence of live rodents, rodent feces, urine, and gnawing and nesting found by the FDA. This incident adds to the ongoing issues faced by the Dollar Tree-owned discount chain store.