Dollar Tree, a discount retailer known for its "one dollar store," announced on the 13th local time that it plans to close nearly 1000 stores nationwide after suffering significant quarterly losses. The "indigestion" after self merger and acquisition, coupled with high inflation and intensified competition, is an important reason for the predicament of the US dollar tree.
How big is the loss this time? The latest quarterly performance report for the 2023 fiscal year released by USD Tree shows that the company suffered a net loss of approximately $1.7 billion, which is a sharp decline compared to the cumulative net profit of $711 million in the previous three quarters. Affected by this, the stock price of the US dollar tree fell by over 13% at one point after opening on the 13th. Faced with the development dilemma of sharp decline in profitability, the US dollar tree had no choice but to "cut off its arm and survive".
On the one hand, the US dollar tree has been experiencing indigestion since acquiring Family Dollar for over $8 billion in 2015. In the words of Neil Sanders, General Manager of Global Data, the US dollar tree has been cleaning up the mess it inherited over the past decade, but has not been able to completely turn the tide.
On the other hand, the continuous high inflation in the United States has led to the decline of consumers' purchasing power, squeezing the profit space of retailers such as Dollar Tree, and intensifying their competition with competitors such as Dollar General and Wal Mart.
Life for American retailers is not easy. Some analysts believe that the US retail industry will become a hot bankruptcy area in 2024, and the trend of retailers closing stores in the US is still ongoing. Can closing a store improve the profitability of retail enterprises? Can "broken arm" really "survive"? It's really hard to say. (Economic Daily reporter Sun Yajun)