Snip

By Nathaniel Meyersohn | CNN

New York — These are tough times for two big US dollar store chains. In the past month, Family Dollar said it will close nearly 1,000 stores and 99 Cents Only said it will go out of business.

Both companies said inflation and shoplifting have contributed to their troubles. While inflation has pressured the companies’ low-income customer base and shoplifting has squeezed their profits, those factors alone can’t explain their difficulties.

Years of strategic mistakes and underinvestment have plagued Family Dollar and 99 Cents Only, retail analysts say. Both brands were acquired by other companies and faltered under their new owners.

‘They didn’t know how to run Family Dollar’

Family Dollar will close 600+ locations this year, and 370 stores over the next several years as store leases expire. These locations are unprofitable for the company, Dollar Tree CEO Rick Dreiling said on a call with analysts last month.

But Family Dollar’s woes date back more than a decade. Messy stores, poor store management, high prices and over-expansion plagued the company, analysts say.