retail news in context, analysis with attitude

The Wall Street Journal reports that Family Dollar said yesterday that it will close 370 stores this fiscal year, will eliminate 10 percent of its corporate jobs, and will cut prices on 1,000 items.

The company had already announced that it would close 30 stores this year.

According to the story, "The move comes after Family Dollar reported another quarter of deteriorating results, with second-quarter profit down 35%, overall sales declining 6.1% to $2.72 billion, and sales excluding newly opened or closed stores falling 3.8%. The company also cut its outlook for the year, as it takes on charges for the job cuts and stores closures.

"The company blamed the frigid, snowy weather for part of the sales decline, which kept shoppers at home and interrupted deliveries. But Family Dollar is also moving away from an on-again, off-again discount strategy that had cost it customers and market share."
KC's View:
All this stuff only matters if consumers can feel the impact in the stores, where it counts. If they go to the store and feel like the selection is relevant, like the prices live up to the promise, and like it is a better overall experience than that offered by the competition, then the changes will be effective. But if these are just cuts, without any sort of investment in making the stores better, then they're just cuts. And the bleeding will continue.