The US Consumer Is So Strong, Family Dollar Is Closing 370 Stores

Tyler Durden's picture

First, they came for the upper middle-priced retailers when Macy's shut down 5 stores and fired 2500... and nobody said anything.

Then, they came for the middle-priced retailers when JCPenney announced it would shut down 33 stores and fire 2000... and nobody said anything.

Then, they came for the lower-priced retailers when Radioshack celebrated the one year anniversary of shutting down 500 stores by shutting down 500 more...  and nobody said anything.

Today, as we plumb the depths of the US economic food-chain in that last bastion for the impoverished US consumer, dollar stores, we find that that staple for low-cost "everything" Family Dollar, which operates 8,100 stores around the country, will be shutting down 370 stores "as it tries to reverse sagging sales and earnings." It was not clear immediately how many thousands of workers would be affected by the store shuttering. We assume "many to quite many."

And what do they say? Why, that "the US economic recovery is obviously stronger than ever" of course!

From AP:

The retail chain follows competitors in highlighting the split between shoppers who are enjoying an improving economy and those being left behind.

 

Dollar General, the nation's largest dollar-store chain with 11,100 locations, offered a weak profit outlook last month after reporting weak fourth-quarter sales. And Dollar Tree, which operates about 5,000 locations, missed profit expectations for the holiday quarter in February.

 

Family Dollar has stumbled even more than its rivals because it has made mistakes in pricing, merchandising and the locations of its stores, analysts say. Still, the industry's problems are a big departure from a few years ago, when Family Dollar and other chains packed in customers and expanded rapidly by catering to cash-strapped people during the Great Recession.

 

But that expansion has spread shoppers thin. And retailing giant Wal-Mart is muscling in, too, by accelerating its growth in small stores, while increasing its offerings of small packages that are easy on the budget.

It wouldn't be a pathetic management team if it didn't scapegoat the weather instead of casting blame where it truly lies: an incompetent Federal Reserve that has done nothing for the recovery of the "non-1%" and sure enough:

Family Dollar Chairman and CEO Howard Levine told investors on a call that the poor weather led to numerous store closings, disruptions in merchandise deliveries and higher-than-expected utility and maintenance expenses.

Oh so, the reason revenue dropped 3.8% in the quarter was snow. So why did revenue drop 2.8% in the last quarter of 2013? Fear of imminent snow?

Levine did retain a tiny shred credibility when he added that "shoppers' financial constraints and a discount-driven holiday season also played a role." A rather massive one.

What other mistakes did management make?

Family Dollar had shifted away from its focus on $1 items and had offered too many temporary promotions, retail consultant Craig R. Johnson said. The company now says it wants to go back to focusing on everyday low prices and $1 items to restore confidence it offers a predictably good deal every time a shopper visits the store.

Yup: the US recovery is so strong, consumers can't even afford to spend $1 on groceries. And now buy stawks. The Fed demands it.

Finally, we are not being entirely fair. It is not every retailer that is getting crushed. Only those catering to the non 1% of course. "The retail chain follows competitors in highlighting the split between shoppers who are enjoying an improving economy and those being left behind." Indeed, as we first showed several months ago in "Shopping With Bernanke: Where QE Cash Ends Up Tells Us Who Benefited"...


"Recovery"

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buzzsaw99's picture

Take another bonus Levine.

Silver Bug's picture

What a joke and a bunch of propaganda, the US economy is not recovering, this mantra they keep chanting is not working. People are waking up.

 

http://jimroger.blogspot.ca/

Rainman's picture

What's next .. Family Ruble Store ?

Skateboarder's picture

No, Family Yuan store. Taking out the middleman - straight from the factory to you, bitchezz.

Citxmech's picture

Sorry to jump-in off-topic - but anybody watching BTC get monkeyhammered right now?  JFC it was at $400 this morning - now at $360 and dropping. . . 

Pure Evil's picture

Where's PhoneSexStar when you need him/her/it to rally this BiTCh back up?

Charles The Hammer Martel's picture

I can think of at least 5 wal marts that have no reason to still be open in a 25 mile radius of where I am. The impossibility of these stores to ever turn a profit again in this environment is astounding but that company just does not have the balls. They will file bankruptcy within the decade, take that to the bank.

Cursive's picture

@Charles the Hammer Martel

At least Wal-Mart usually gets 10-yr. property tax exemptions that subsidize operations.  WMT, FDO and DG are fighting a turf war for the mouth breathers.

Charles The Hammer Martel's picture

when you mentioned mouth breathers, I instantly thought of that asian carp fish that kids love to feed with those little pellets you can get out of that machine with a quarter.

Harbanger's picture

Wait till the dollar is devalued and everything in Walmart (99% of which is imported) becomes a high end store.

Keyser's picture

Bingo!!! Where will the rabble shop then? 

 

Pure Evil's picture

Garage sales, flea markets, and second hand stores like Salvation Army, Goodwill, and Habitat for Humanity.

Shad_ow's picture

They will be shopping at other people's homes.

cynicalskeptic's picture

Lately, Walmart's largest sellling sector is FOOD.  Walmart is raking it in big time from EBT and other government programs.

What happens when THOSE are cut back? - and it is GOING to happen.

Food pantries are in bad shape already, what's left?  Dumpster diving?  But if the stores that used to throw stuff out are closed there aren't any dumpsters to go searching through......

 

 

Harbanger's picture

How were the hungry fed in the US before big Gov became the caretaker?  That's what it will have to be again.  It's not the end of the world, better relationships and some good may come of it.

813kml's picture

I think that's a bit optimistic, the better relationships will consist of rioting and looting with friends. 

daveO's picture

Only if it's a Cold Turkey withdrawal of handouts. The plan is to slowly withdraw handouts via inflation.

NOTaREALmerican's picture

Re:  How were the hungry fed in the US before big Gov became the caretaker?

When will you guys learn...  We're here now because we've already answered this question MANY times.  NO-FUCKING-ONE takes care of anybody.

Re:  That's what it will have to be again.

Yes, it WILL happen again, that goes without saying for Christ's sakes,  and then what?   Do you actually think people live peacefully while staving.  Again, we have gone through this many times.

Perhaps if the Libertarians could comprehend HUMAN cause-n-effect instead of thinking like idiot-savant marxist economists some FUNCTIONAL economic system could be created.

Bangin7GramRocks's picture

There was a million more farms. The world is built around industrial operations with just-in-time inventory systems. There will be much chaos and violence before we return to the old system.

Seek_Truth's picture

And there was a much larger percentage of the population that believed in God, and because of this- absolute, rather than relative, morals.

Love your neighbor meant something very different during the Great Depression as compared to today.

 

daveO's picture

Mom grew up during the depression. She said hobo's, from the railroad, came by everyday offering to do chores for food. She said her mom fed them day old biscuits that she saved just for that purpose. Day old biscuits taste pretty good to starving folks.

hobopants's picture

If they cut the foodstamp program they better have the helicopters and private jets standing by. Stock market collapse would be nothing compared to the chaos resulting from the end of bread and circus welfare programs.

LooseLee's picture

Ha, I immediately thought of BANKERS & POLITICIANS and their supporters...

ssp2s's picture

Wealth effect

cougar_w's picture

But of course.

i interpret this to suggest Americans are now refusing to pay less than a dollar, for anything, on general principles.

Micky D's better start to work on their new Continental cuisine menu. Obviously french fries and a burger simple are not going to cut it.

Cursive's picture

@cougar_w

I refuse to go to McD's unless there is a thong-wearing topless chick throwing a tantrum.  Think of it as dinner theater for the New Normal in Obamaneyville.

cougar_w's picture

Man I wish I lived where you do. Hell I'd probably pay 5 bucks at the door.

Around here the entertainment resorts to people in Target-label combat fatigues and Oakland Raiders hats (worn sideways, nigga) walking down the sidewalk shouting and "training" their pitbull to attack a guy running away wearing a gorilla suit. I shit you not, I have the video here somewhere. Wife was so terrified, she called the cops. They just laughed.

As a result I'm making myself a battle axe to keep near the door. And I'm really good at iron work. Maybe we'll see what their dogs make of a 200 pound cougar going all Medieval on their asses.

Smegley Wanxalot's picture

All their customers are buying PEZ candies on Amazon now, one dispenser at a time.

 

Headbanger's picture

LMAO!   I can't believe anybody still remebers PEZ. And they're still going strong.

https://www.pez.com/

Too funny.

I wonder if they still make those horrible little wax bottles filled with some sweet syrup shit?

 

BandGap's picture

Yep, they sell them at a local candy shop here, along with all that other 2 fopr a penny confection.

I yearn for the 70s.

813kml's picture

You know things are bad when people fondly reminisce on the competent leadership of Tricky Dick.

Late onset ADHD's picture

True story... not 30 minutes ago, I had an "Edward Jones" rep going door to door in my area "introducing himself" and asking if there was anything he could do to be of service. I live on five acres and always need odd jobs done, so...

I asked him if he wanted to paint my house. He looked at me funny.

I said "never say never, pal... did you see the VIX today?"

the shit is gettin' out of control.

seek's picture

Knock. Knock.

Opens door.

"Yes?"

"Excuse me sir, I'm your local Edward Jones rep, and I have a very important question."

"Go on..."

"Are you a muppet?"

Late onset ADHD's picture

I didn't want to dick with him too much...

I did ask real fast "do you read ZH?"

"What's that?" was the response.

Who's the muppet now motherfucker.

I actually felt bad for the guy.

aVileRat's picture

Yup

Can confirm it must be getting really bad on bond desks & deriv prop outfits. Have had calls this week from as far away as Singapore, plenty of VP & Director's willing to relocate for the mid-level jobs at a (they offer) 60% pay cut. And they have never touched the sector before.

Good times ahead, I'm going to bet based on average sell-side desk activity things are going to get very sticky everywhere soon. Unless you are a organic growth corp, with less than 1x debt, good luck out there. Sadly, since 99% of the US Economy is either biotech, tech, app or consultants who are only in the game to raise equity and then "flip" the asset to a bigger sucker, a lack of synthetic leverage via seasoned equity rounds or fiscal leverage via yield reaching insitutions are going to endgame this bull soon.

 

daveO's picture

EJ loves targeting retirees with door to door solicitation and free lunch offers.

Late onset ADHD's picture

Really? I have never been solicited by a "financial type" door to door... ever. Plus it's three hundred yards between front doors out here. It really surprised me... in a harbinger kind of way.

EJ needs to rethink their methods... that is just creepy and reeks of desperate.

starman's picture

if we'd just all listened to Jo the plumber!

RacerX's picture

They're "Streamlining operations"

kurt's picture

Hey Fuckers! The recession will end when gasoline is $2.65 per gallon. The difference is wealth extraction from the dying middle class. The reason is old-fashioned monopoly price manipulation. Of course the other half is a crime syndicate called the "Fed".

Where are the real men? Where have you gone? When will you act?

Stop watching TV before it's too late. False flag coming. Attention goverment employees: you swore an oath to protect the Constitution. Attention military, your leaders are traitors.

A conspiracy is a group of people agreeing on something. Can't you conceive of a conspiracy to take down the USA? What do you think is happening?  

El Crusty's picture

more like $1.50 a gallon- anything more is a ripoff and everyone knows it.

Cattender's picture

Damn! i just bought a Bottle of dish soap from Family Dollar back in January...

Dave Thomas's picture

Me too, ever notice how the sizes of the various cleaning products are not the standard sizes?

Palmolive at Randalls = 25 oz

Ajax at Dollar tree = 11oz

 

Still the Ajax is the better buy at one whole dollar, the Palmolive at Randalls is like 4.97 rofl.


http://www.youtube.com/watch?v=p14tIBa1f70

NickVegas's picture

Was thinking about shopping at Randalls. Wanted to get a "club card" dealy thing. No anonymous signup, no shoppy. Fuck Randalls, and fuck the data harvesters.

joego1's picture

Take a bow Berry.

SmilinJoeFizzion's picture

you only have to buy that cheap Chinese toxic knockoff WindeX twice a year.