Family Dollar had to shut down over 400 stores and a distribution center in Arkansas due to a ‘rodent problem.’
Where’s The Rat Problem This Time?
The latest rodent infestation occurred when Family Dollar discount store chain had to shut down over 400 stores and a distribution center in Arkansas due to a “rodent problem.”
Owned by the larger Dollar Tree (DLTR) – Get Dollar Tree Inc. Report chain, Family Dollar is a value store chain selling discount versions of everything from Kraft macaroni and cheese and Cheerios cereal to baby diapers and personal hygiene products.
Back in February, the Food and Drug Administration flagged a rodent infestation at Family Dollar’s 850,000-square-foot distribution center in West Memphis, Ark.
The company was forced to close both the distribution center and over 400 Family Dollar stores where items from it were shipped since the start of the year.
After evaluating what it would take to address the problem to meet FDA standards, Family Dollar announced that it would be shutting down the Arkansas distribution center entirely in May.
It still has 11 other similarly-sized centers in states like North Carolina, New York and Texas.
“We are relocating stores to other DCs to fulfill the store deliveries and have sufficient capacity to serve all stores in our remaining fleet of distribution centers,” chief executive Mike Witynski said in a recent earnings call
Despite the closures, Dollar Tree reported that its consolidated net sales rose by 6.5% to $6.9 billion and raised its full-year forecasts to a range of $27.76 billion to $28.14 billion.
The company is headquartered in Virginia and has over 15,000 locations in the U.S. and Canada.
“Family Dollar’s comp sales for the quarter were negatively impacted by an estimated 200 basis points by the temporary closures of approximately 400 Family Dollar stores served by our Arkansas distribution center,” Witynski said.
Dollar Trees shares were, as of June 15, up 53.75% to $154.80 year-over-year.
Dollar Stores Remain A Lifeline For Many
Rodent infestations aside, dollar stores and value chains remain a lifeline for many low-income Americans.
With consumer inflation reaching a record-high 8.1% in May, many are left paying more for everything from energy bills and groceries to the perennial source of worry: gas.
And while inflation is more moderate at name-brand stores, low-cost stores are seeing some of the starkest increases.
According to a study from data research company Numerator, grocery costs at dollar stores spiked by 14.3% from 2021 and 22.5% from 2020. By contrast, online grocery store prices rose by only 12.4% from 2020.
At the same time, traffic at dollar stores and discount chains has been through the roof — compared to 2019, foot traffic rose by 20.4% at Family Dollar, 28.2% at Dollar General, 34.1% at Five Below FIVE, 3% at Big Lots BIG and 13.7% at Dollar Tree.
This contrast indicates only one thing: cheaper options available at value chains like Family Dollar and Dollar Tree are increasingly a way for cash-strapped buyers to outpace inflation and get the day-to-day items they need at lower prices.
Numerator numbers found that, while 45% of the American population earned below $50,000 a year in 2021, that number rose to 59% for Family Dollar shoppers.