1,000 Family Dollar and Dollar Tree locations will close

Family Dollar, a struggling bargain retailer that primarily serves urban poor, said on Wednesday that it will be closing almost 1,000 locations.

Family Dollar's reputation has suffered due to years of poor management and subpar retail facilities. Recently, Family Dollar—owned by Dollar Tree—was fined over $40 million due to a rat infestation at a warehouse that resulted in the temporary closure of hundreds of stores.

A general consumer retreat and decades-high inflation have taken a toll on Family Dollar's client base and earnings, making the chain's competition with Dollar General, Walmart, and other bargain retailers more fierce.

“Persistent inflation and reduced government benefits continue to pressure the lower-income consumers that comprise a sizable portion of Family Dollar’s” customer base, CEO Rick Dreiling said Wednesday on a call with analysts.

Due to store lease expiration, Family Dollar will close 600 sites this year and 370 locations over the following few years. In the US, Family Dollar has about 8,000 locations. Additionally, Dollar Tree warned that as leases expire, it will close 30 stores.