Dollar Tree Closes US stores, Canadian operations unaffected

What’s happening at Dollar Tree?

Dollar Tree, the discount chain based in Virginia, is set to close up to 1,000 stores in the U.S. while maintaining its Canadian operations. The company revealed this week that it will shutter 600 underperforming stores in the first half of 2024 and another 400 as leases expire over the coming years.

Official Statements and Context

A company spokesperson clarified that the closures would not impact its Canadian locations: “This store portfolio review was focused on our U.S. stores and does not involve our Canadian stores,” the spokesperson stated.

The announcement followed a significant financial downturn, with Dollar Tree reporting a fourth-quarter loss of $1.7 billion, a stark contrast to a $452 million profit in the previous year. The company currently operates 227 stores in Canada and approximately 16,000 in the U.S.

Industry Reaction

• Retail analyst Bruce Winder noted, in an interview with The Toronto Star, that the U.S. market’s high competition and economic challenges contribute to Dollar Tree’s struggles. “The U.S. is really oversaturated with stores period, and the discount store market is really crowded,” Winder explained. He highlighted that many of Dollar Tree’s core consumers are financially struggling, impacting store performance.
• Retail consultant Lisa Hutcheson emphasized the need for Dollar Tree to reassess its pricing strategy. “The store portfolio review is one thing, but what they really need to do is look at their pricing strategy. They’ve got negative margins on some things,” Hutcheson said. She also suggested the possibility of selling some Canadian stores to competitors.

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