Family Dollar, one of the most popular discount store chains in the U.S., but it’s having a difficult time now. The company has confirmed that one of its stores, located in Old Orchard Beach (Maine), will close forever next month. The last day it will be functioning is November 15, so you only have a few weeks more to make the most of the last sales before the definite closure. So, let’s find out what happened to Family Dollar in Maine, shall we?
Part of a nationwide shutdown
This closure is not an isolated case, it’s part of a nationwide plan from Family Dollar to close about 700 stores in the entire country. The company aims to reduce costs and recover from the serious financial issues they have been struggling with for years.
At some point, Family Dollar was considered a great success story in the American retailing market: it became popular for offering cheap products in small towns and low income communities, so it was a regular place to buy for thousands of families who wanted to save some money.
However, in the last couple of years, the situation has changed because the sales dropped, the costs have increased, and competition was harder. All of this made the chain start losing money and take some drastic measures.
Maine
The closure of the store in Old Orchard Beach enters the list of the Family Dollar stores that had to close in Maine (10 stores plus this new one). This means that more than 10 communities have already lost their local store in the last year.
Neighbors have seen a ‘’closing sale’’ sign in the store which confirmed the definite closure. According to local news, this could be just the beginning since many Family Dollar stores in Maine have long-term rental contracts, and some of those leases will expire soon. Once they do, more stores could close in 2026 and 2027.
New Family Dollar owners
In July of this year, Family Dollar was sold for $1,000 million to two investing companies: Brigade Capital Management and Macellum Capital Management. With this sale, Family Dollar ended its long and complicated relationship with Dollar Tree, its old owner.
After the purchase, the new owners announced a review of all 53 stores in Maine to decide which ones are worth it and which ones aren’t. According to their explanations, their intention is to go back to the roots of the company focusing on low income and small communities and offer really affordable prices.
Big challenges ahead
Even though Family Dollar has new owners and a new vision, the company faces many challenges. Experts point out that its prices are higher than other discount chains, which makes many clients look for cheaper options. What’s more, inflation has reduced the purchasing power of many families, who have less money to spend.
Apart from all of this, we need to take into account the damage to the company’s reputation and the lack of products in some stores. So, analysts believe the Family Dollar recovery will take time and it will need a deep transformation to gain customers’ trust back.
Prices change in Dollar Tree
At the same time, Dollar Tree, the old owner, has also made some changes. Despite its name, not every product costs $1.
Today, most of the products cost about $1.25 and some from the Dollar Tree Plus area can cost up to $5. This strategy started in 2019 when Dollar Tree began testing the ‘’Plus’’ halls in 100 stores to offer more variety of products. In 2022, the program was already active in more than 1,500 stores.
So…
This closure shows how even long-standing discount stores can struggle when the economy changes and shoppers’ habits evolve. However, Family Dollar’s new owners hope to rebuild the brand, focus on smaller communities, and offer better prices. Whether this will be enough to save the chain remains to be seen, but we can say that Family Dollar’s story is one of survival, change, and hope for a comeback.