Skip to main content
  1. News
  2. Business & Finance
  3. Industry

Family Dollar to cut jobs and close stores

See also

Family Dollar Stores, Inc., the discount store chain where cheapness reigns supreme, is closing stores and reducing its workforce according to an MSN Money article published April 10, 2014.

Family Dollar profits have been on the decline, falling 35 percent for the recent quarter end. Sales at stores open one year or more declined 3.8 percent for the same quarter ending March 1, 2014. The decision to shut down less productive stores and layoff some of the workforce is necessary, management believes, to curb these downward trends and remain competitive with other discount stores like Dollar General and Dollar Tree.

Pricing is another concern. Market research shows that customers who shop at these dollar discount stores are extremely price sensitive and will flock to a different store over the slightest price increase. To win customers back, Family Dollar plans to cut prices on 1,000 basic items, making them more in- line with the competition. Its sales have been flat or in decline across most consumable goods with only a few exceptions. Frozen foods and tobacco, in spite of their unhealthy image, both enjoyed sales increases for the quarter.

Family Dollar operates 8,100 stores and plans to close 370 as part of its cost- cutting efforts. It has also scaled back future plans. Rather than open another 500 stores next year, Family Dollar will open between 350 and 400.

Store closures and job reductions are expected to save about $40 million to $45 million starting in the third quarter of 2014. Overall sales during the recent quarter were $2.72 billion, which was below the $2.77 billion expected by Wall Street analysts. Family Dollar is counting on these cost cutting measures, along with a stronger focus on more profitable new stores, to improve its financial condition.

Advertisement

News

  • Gaza school shelled
    Israeli airstrikes topple a school in Gaza suspected of housing rockets; dozens killed
    Video
    Video
  • Ebola outbreak
    An American with Ebola virus died shortly after boarding three planes
    World News
  • Why dogs smell butts
    Researchers figure out why dogs like to smell each other's butts
    Pets
  • Time to stop tanning
    The surgeon general advises us not to tan as melanoma cases are on the rise
    Health News
  • Zimmerman lands dream job
    George Zimmerman lands his dream job as a security guard at a gun/motorcycle shop
    Headlines
  • 10 smartest states
    Here are the 10 most educated states in the U.S., did yours make the cut?
    US News