NEW YORK — Dollar stores are feeling the pinch from mounting financial pressures on low-income shoppers.
Family Dollar said Thursday that will cut jobs and close about 370 underperforming stores as it tries to reverse sagging sales and earnings. The discount store operator will also permanently lower prices on about 1,000 basic items.
Family Dollar Inc., which operates 8,100 stores, did not provide details on how many jobs it would cut.
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 about 11,100 locations, offered a weak profit outlook last month after reporting weak fourth-quarter sales. And Dollar Tree, which operates nearly 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 by catering to cash-strapped people during the Great Recession.
Family Dollar said the store closings and job cuts should reduce annual operating expenses by $40 million to $45 million. The Matthews, N.C., company also said it will slow new store openings beginning in fiscal 2015. It now anticipates opening 350 to 400 new stores. In fiscal 2014 it added about 525 stores.