Family Dollar stores may be more suited to a weak economy. That is probably one reason the stores are partially shutting down in the current times of economic recovery.
The report out recently at Family Dollar stores showed a decline in sales. This has provoked a backlash. Over 370 individual outlets of the gigantic chain are to close down soon. That however only accounts for 5% of the overall width and breadth of this thrifty shopping conglomerate.
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The alibis which the firm had in store included the bad climatic conditions and a promo milieu. However, most economic pundits say there is a deeper reason behind the closures.
These shopping centers survive better in times of trouble when people need to save up on some cold hard cash. Now is a period of convalescence for the pecuniary patterns of the global village. Hence, their demise suggests that they have become largely obsolete.
"The flip side of that theory is that 99¢ shops suffer in strong economies, losing sales when consumers feel flush enough to frequent sleeker stores or pay for home delivery. To be sure, that thesis holds a bit of water depending on what data one looks at," reports Businessweek.
Of course, there is a kernel of truth in this theory. But it wasn’t as if these retail dollar stores didn’t suffer equally during the recession of 2008. They too saw some omens on the horizon and had to shape up or ship out.
In contrast to Family Dollar, Dollar General and Dollar Tree have expanded their influence and literally seen a miracle in growth. The fact that you can purchase a lovely deodorant stick for less than a dollar, or a can of guacamole for slightly more than a buck, is only possible at these three chain stores.
These retail fixtures offer shopping experiences within a shoestring budget which is a good thing. It’s ultimately a complex game of statistics and profit and loss not to mention supply and demand. And the drop of Family Dollar stocks by 14% may signal a change in strategy for future survival.
The Family Dollar store management and administration will have to foresee the trends that are liable to occur in the times which lie ahead. Only then will the enterprise prosper despite the atmosphere of economic flux.