The recent financial struggles of dollar stores, particularly Dollar General and Family Dollar, are having a profound impact on low-income families across the United States. As of September 30, 2024, Family Dollar has announced the closure of approximately 600 stores over the next six months, with an additional 370 closures as leases expire. This follows a staggering 657 Family Dollar stores that shut down between February and August 2024. These closures are particularly concerning as SNAP benefits account for $11 of every $100 spent at Family Dollar, a critical resource for many families relying on food assistance. Latrina Begley, a Nashville resident, expressed her reliance on Family Dollar for feeding her family of six, highlighting the personal toll of these store closures.
The closures predominantly affect low-income neighborhoods, exacerbating existing food access issues. The USDA has identified these areas as low income with limited access to healthy food options. The financial difficulties faced by these stores are linked to a reduction in food benefits post-COVID pandemic, which had previously led to a surge in sales for Family Dollar. The poverty line for a family of four is approximately $30,000, and with the economic landscape shifting, families are finding it increasingly difficult to make ends meet.
In addition to the closures of Family Dollar, Dollar General has also reported significant financial challenges. As of September 11, 2024, Dollar General's stock price has dropped to $84.20, reflecting a 32.01% decline year-to-date. The company recently reported disappointing earnings, with an EPS of $1.70 for Q2 2024, falling short of estimates. This has led Dollar General to revise its full-year EPS guidance down to a range of $5.50-$6.20. Economic experts warn that these trends signal broader economic troubles, particularly for consumers earning between $30,000 and $45,000, who are experiencing heightened financial pressure.
The closures of dollar stores, which have become essential for low-income families, are compounded by rising prices at remaining convenience stores, further limiting access to affordable food. Since 2019, 61 municipalities have limited dollar store expansion, yet Family Dollar has opened 69 new stores during this period, indicating a complex landscape for retail in low-income areas. As families face these challenges, the urgent need for economic recovery strategies becomes increasingly apparent. [4420e45a] [a8b2bde1] [8e5f3997] [12052339] [bb6f022a] [43a13c92] [a0c00f68]