The US Consumer Is So Strong, Family Dollar Is Closing 370 Stores
The retail chain follows competitors in highlighting the split between shoppers who are enjoying an improving economy and those being left behind.Dollar General, the nation’s largest dollar-store chain with 11,100 locations, offered a weak profit outlook last month after reporting weak fourth-quarter sales. And Dollar Tree, which operates about 5,000 locations, missed profit expectations for the holiday quarter in February.Family Dollar has stumbled even more than its rivals because it has made mistakes in pricing, merchandising and the locations of its stores, analysts say. Still, the industry’s problems are a big departure from a few years ago, when Family Dollar and other chains packed in customers and expanded rapidly by catering to cash-strapped people during the Great Recession.But that expansion has spread shoppers thin. And retailing giant Wal-Mart is muscling in, too, by accelerating its growth in small stores, while increasing its offerings of small packages that are easy on the budget.
Family Dollar Chairman and CEO Howard Levine told investors on a call that the poor weather led to numerous store closings, disruptions in merchandise deliveries and higher-than-expected utility and maintenance expenses.
Family Dollar had shifted away from its focus on $1 items and had offered too many temporary promotions, retail consultant Craig R. Johnson said. The company now says it wants to go back to focusing on everyday low prices and $1 items to restore confidence it offers a predictably good deal every time a shopper visits the store.
Source: http://nunezreport.blogspot.com/2014/04/the-us-consumer-is-so-strong-family.html
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