Beloved discount store to shut down many locations due to declining sales – The Mirror US
In the early part of 2025, Dollar General revealed plans to close 45 locations under the pOpshelf brand, as well as 96 outlets. Additionally, six more outlets are set to be converted into Dollar General stores. With over 20,000 locations nationwide, the decision to shut down these stores was based on a thorough evaluation of the company’s store portfolio, which indicated that none of these locations were profitable. The specific locations that will be affected by these closures have not yet been disclosed by the company, but the move comes in response to a decline in consumer spending, particularly among lower-income Americans. A significant number of Dollar General customers struggle to cover basic necessities, with many having to make sacrifices even on essential items.
During a post-earnings call, CEO Todd Vasos delved into the purchasing patterns of Dollar General’s customer base, which primarily consists of individuals earning less than $50,000 annually. He noted that a prevalent trend among customers as they entered 2025 was a return to spending less or “trading down.” This shift in consumer behavior reflects the immense financial challenges faced by many Americans amidst rising inflation and economic instability.
Despite a 4.5% increase in revenue to $10.3 billion for the fourth quarter of fiscal year 2024, Dollar General’s net income plummeted to $191 million, which was a stark decline compared to the previous year’s earnings for the same period. The retail giant’s shares also suffered a substantial drop of nearly 70% over the past two years due to fierce competition from industry rivals like Walmart, Shein, and Temu. However, Dollar General has shown signs of recovery since CEO Vasos returned in 2023 and implemented successful turnaround strategies.
The planned closures of these underperforming stores are set to take place throughout the upcoming year. Vasos emphasized that these locations had become challenging to operate efficiently. Industry experts anticipate that Dollar General may be forced to shut down more stores in the near future as part of an ongoing restructuring effort to streamline its operations and improve profitability. This pattern of closures is a common occurrence for Dollar General when stores fail to meet performance targets or when there is an oversaturation of stores in a particular area.
The looming closures of Dollar General outlets underscore the broader challenges faced by the retail sector, with many businesses grappling with sluggish sales and reduced profitability amid economic uncertainties and changing consumer behaviors. Dollar General’s decision to shut down these locations is a strategic move aimed at optimizing its store portfolio and ensuring long-term sustainability in a highly competitive retail landscape.
