A POPULAR discount retail chain and Dollar Tree rival has officially announced its plans to shutter 141 stores across the country.
The unexpected announcement came as Dollar General's CEO framed the store closures in a positive light.
Discount stores have struggled to keep pace in the current retail landscape, facing pressure due to rising costs and shifting consumer preferences.
As a result, many dollar stores have been on the chopping block.
For example, Dollar Tree announced last March it would close roughly 1,000 locations in the next few years.
The discount giant, parent company of Family Dollar, outlined its plans to close around 600 of its subsidiary's stores in the first half of 2024.
The company also announced its intention to shutter 370 Family Dollar and 30 Dollar Tree stores across the next several years as their leases expire.
Rival chain Dollar General has now joined the list of discount stores preparing for mass closures.
The company plans to close 96 Dollar General stores and 45 of its Popshelf locations during the first quarter of this year, it shared in its fourth quarter earnings report.
“As we look to build on the substantial progress we made on our Back to Basics work in fiscal 2024, we believe this review was appropriate to further strengthen the foundation of our business,” said Dollar General CEO Todd Vasos.
“While the number of closings represents less than one percent of our overall store base, we believe this decision better positions us to serve our customers and communities.”
The discount giant, with over 20,000 US stores, has yet to share which locations are slated for closure.
Retail closures are on the rise, projected to impact roughly 15,000 brick and mortar stores this year, up from 7,325 last year, per data from Coresight Research, the leading research and advisory firm specializing in retail and technology.
Last year's closure rates were so high due to inflation, which has consumers pulling back on discretionary spending, head of global research for Coresight Research John Mercer previously told The U.S. Sun.
Mercer explained that this "generally heightened consumer caution" was most pronounced among lower-income shoppers.
As a result, discount stores such as Big Lots, 99 Cents Only Stores, and Family Dollar were disproportionately impacted, experiencing the highest number of shutters last year.
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
Dollar General has likewise taken a hit by the drop in consumer spending, seeing a 49% decrease in its fourth quarter operating profit, down 30% for the entire fiscal year.
Although the chain's CEO did not specify the reasons behind and spoke positively of the closures, CEO of Retail Tech Media Nexus Dominick Miserandino warned about the far reaching impacts of Dollar General's impending closures.
“For many low-income families, Dollar General isn’t just a store - it’s a vital resource for affordable essentials," the expert told The U.S. Sun.
Miserandino explained that when these stores shut down, it creates "a void that’s hard to fill," impacting both the daily life and well-being of shoppers.
“This trend underscores a pressing need to address the economic disparities that leave certain populations vulnerable when accessible retail options disappear,” he said.
Beyond closing down locations, the tough retail climate has pushed Dollar General and many other discount stores to raise their prices above $1.
The move both undermines their competitive advantage and further amplifies the financial pressure on those who rely on dollar stores for groceries and essentials.
As consumers watch their wallets due to inflation, restaurant chains have similarly felt the impact.
For example, a beloved Mexican chain confirmed it will close down 70 locations just weeks after suffering a fatal blow.
Meanwhile, a fan favorite restaurant has closed after 26 years as the chain confirms plans to shut 150 low performing locations by 2025.
