Family Dollar And Dollar Tree Will Close 1,000 Stores
Years of mismanagement have finally taken a toll on Family Dollar reports CNN.
Family Dollar, the struggling discount chain that caters to low-income customers predominantly in cities, said Wednesday it will close nearly 1,000 stores.
Family Dollar, which is owned by Dollar Tree, was recently fined more than $40 million for a rat infestation at a warehouse that forced hundreds of stores to temporarily close.
Family Dollar will close 600 locations this year and 370 stores over the next several years as store leases expire. Family Dollar has around 8,000 US stores. Dollar Tree also said it will close 30 stores as leases expire.
Family Dollar stores were in worse condition than Dollar Tree expected when it acquired the business, analysts say. Even though Family Dollar has renovated thousands of stores in recent years, many stores are still poorly maintained. Stores are often understaffed and boxes block aisles.
Family Dollar, Dollar Tree, Dollar General and other discount stores have had longstanding theft issues, operating stores with just a handful of employees who have at times been victims of violent robberies and other crimes.
Dollar Tree employees have complained about unsafe working conditions, and OSHA last year criticized the company for a “continued disregard for human safety” that “suggests the company thinks profits matter more than people.”
Family Dollar was hit with a record fine this year for violating product safety standards after selling items that were stocked in a rat-infested warehouse in West Memphis filled with live, dead and decaying rodents.
Dollar General has opened about 1,000 stores a year, making it the fastest-growing retailer in the United States. The company has around 18,000 stores. The companies are battling for many of the same low-income shoppers. Despite the name, these stores sell mostly food and everyday items for between $1 and $10.
Family Dollar has lost ground to Dollar General, in particular due to prices: Family Dollar’s prices can be 10% to 15% higher than Dollar General’s and other discount competitors. Dollar General, which is more than double the size of Family Dollar, can offer lower prices because of its scale.
If there is a reason for Family Dollar to exist at all, what is it? And if you are thinking of shopping at one, please read the above once more.
But proving that people will buy anything, I present …
Dollar Tree (DLTR) Monthly
The reported PE is 24.41, not a bargain at all, even after today’s action.
Dollar Tree Daily
(Click on image to enlarge)
How long before people buy this dip?
Goldilocks View Is Pervasive
Yahoo!Finance is touting 11 Oversold NASDAQ Stocks To Buy Right Now
On March 12, Gabriela Santos, chief market strategist at JPMorgan, joined CNBC’s “Closing Bell” to discuss her thoughts on the current outlook and market. Here’s what she had to say:
“We do sound positive, first on the fundamentals. For the economy, we see growth normalizing this year 2%, but zero recession in our base case. We see inflation also moderating towards 2% by the end of the year, so you still have a pretty resilient nominal growth backdrop for companies, so resilient revenue growth. At the same time, it seem to us that the big takeaway from fourth-quarter earnings was a bottoming in the margin contraction from last year.”
The highlights above show that a positive trend for stocks should continue as we move forward into 2024, which should be encouraging for investors looking to buy into the market. Considering the upside gains in the NASDAQ being seen so far, this index may be a good place to start for those looking to buy.
Is there anyone who has not endorsed the soft landing thesis?
Soft Landing Runway
Let’s check in with former Fed Vice-Chair Alan Blinder and his soft landing thesis.
“The Fed has Already Achieved a Soft Landing” says Alan Blinder.
The overwhelming consensus view is the Fed has inflation licked, the softest of soft landings is here, no recession is in sight, and nothing can go wrong in the stock market.
I disagree on all four.
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