In an effort to increase their profits, Family Dollar is making moves. The discount store will cut prices and jobs, and close stores that are not performing well enough. Profit decreased by 35% between quarters, and sales fell 3.8%. Despite not competing well with stores like Dollar Tree, Family Dollar increased prices which ultimately is what led to such significant decreases in profit and sales. With over eight thousand stores in the US, 370 of them will be closed. Following these closings, the firm will begin a slow expansion of about 400 stores next year. Family Dollar is hoping that this expansion will bring them up to par with their competitors.
http://www.cnbc.com/id/101572250
It is interesting that they are deciding to close 370 stores, but then open 400 more in just a year. I don't think that will be very possible because most large businesses can't open that many stores, especially with a 35% decrease. Family Dollar will need to finance and invest very well in order to make this goal actually happen.
ReplyDeleteI think they should try more advertising. You rarely see commercials for discount stores or any dollar stores in general. A few commercials here or there and a couple well placed billboards targeting an audience of the older generation (because they always look for coupons and discounts) can go along way to improving business.
ReplyDeleteI think this is a poor a strategy. Many family dollar stores lie within low-income areas. This can explain why their profits and sales saw a significant decrease, My advice to this firm would be to reduce the number of goods supplied. They should also focus on selling cheaper goods in order to increase their sales and profits within stores in low-income areas.
ReplyDeleteIt does not make sense to me either how Family Dollar plans to shut down 370 stores and then pick business up enough to open up to 400 within the following year. I also agree that they should tighten their overall inventory and find a focus, perhaps focusing on frozen foods. Cheaper prices will be the only way they can survive with their demographic.
ReplyDeleteI think Family Dollar should focus on their strengths instead of their weaknesses. If they do this, they will be able to increase what they are good at, for example, frozen food sales. This way, they will be able to increase their profits faster than implementing a new product.
ReplyDeleteI completely agree, also the target market of Family Dollar tend to be in the middle class to low class of society. Therefore, with a concentration on frozen food which can last longer and is good in the long term, this will increase their sales.
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