The Family Dollar store chain reported last week that it will cut jobs and close about 370 underperforming stores as it tries to reverse sagging sales and earnings, the Associated Press reported on April 10.
Family Dollar Inc., which operates 8,100 stores, did not provide details on how many jobs it would cut.
A Family Dollar store opened last year in Bellevue. The manager did not return calls for comment.
“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,” The AP reported.
“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,”
In February 2009, National Public Radio reported that Family Dollar Inc. outperformed all other stocks in 2008 on the Standard and Poor’s 500 stock market index. Company President Jim Kelly said at that time that the company’s success was due to wealthier customers looking for less expensive goods.
“Either out of necessity or perhaps they’ve paused to rethink some things as a result of the uncertainty of the economy, … that search for value is something that they’re finding at Family Dollar and, as a result of that, more and more new customers are coming in,” Kelly said.
The AP reported that Family Dollar Chairman and CEO Howard Levine told investors on a call that poor weather this winter in the Northeast, disruptions in merchandise deliveries and higher-than-expected utility and maintenance expenses led to the store closings.
Levine said the company is reviewing its business to increase operational efficiencies and boost its financial performance. Levine said the price cuts, store closings and job eliminations are part of actions it is taking immediately to lift its performance during the review, the AP reported.
The Matthews, N.C., company also said it will slow new store openings beginning in fiscal 2015. It now anticipates opening 350 to 400 new stores. In fiscal year 2014, it added about 525 stores.