Killeen will lose at least one Family Dollar in the next few weeks as part of a nationwide plan by the dollar-store giant to close hundreds of stores this year.
The Family Dollar at the intersection of Trimmier and Bacon Ranch roads is scheduled to close on May 18, according to a local manager.
This is one of about 390 Family Dollar locations closing nationwide, according to Kayleigh Painter, spokeswoman for Family Dollar, which in 2015 was bought out by Dollar Tree.
But the closing stores do not signify the end of the brand, she said.
“We are optimizing our real estate portfolio by opening 550 new stores this year,” Painter said. “All while renovating 1,000 Family Dollar stores, re-bannering 200 Family Dollar to Dollar Tree stores.”
In the fourth quarter of this past year, 84 Family Dollar stores closed — which is 37 more than originally planned, as reported by the Associated Press.
Painter said Family Dollar is working with associates impacted by the closures to retain their employment status at neighboring stores.
There are 11 other Family Dollar stores in Killeen, she said.
President of the Greater Killeen Chamber of Commerce John Crutchfield said while the Bacon Ranch Road branch of Family Dollar is on the chopping block, it could be because of the greater struggles the company faces, but it could also stem from any number of factors, from poor location choice to high rent.
Crutchfield said Family Dollar faces a struggle common to many retailers worldwide: keeping up with Internet sales.
“Retail is still adjusting to the paradigm shift caused by e-commerce — no sign of that ending soon,” Crutchfield said. “Latest numbers I recall indicate that approximately two stores close in the U.S. for every store opened.”
Coresight Research tracks store openings and closures for a select group of retailers in the United States and the U.K., as well as major U.S. retail bankruptcies.
The total year-to-date closures announced for the U.S. have already exceeded the total number for the full year 2018, according to Coresight Research.
U.S. retailers have announced 5,994 store closure and 2,647 store openings this year, according to the report. This compares to 5,864 closures and 3,239 openings for the full year 2018, the report said.
The struggle between online commerce and local retailers is also affecting markets around the world.
U.K. retail announced store openings and closures are running almost neck and neck, with announced store closures at 322 and store openings at 352, according to Coresight Research.
Crutchfield agreed with experts some of the additional challenges facing Family Dollar include rapid growth, inadequate selection of merchandise and unkempt stores.
Dollar Tree Inc., based in Chesapeake, Virginia, acquired Family Dollar in 2015 for almost $9 billion, to bolster its business and compete with rival chains like Dollar General Corp., according to the AP.
But ultimately, Family Dollar pulled down the parent company’s earnings, according to the AP.
The AP reported Dollar Tree Inc. is under a lot of pressure from activist shareholder Starboard Value Hedge Fund to sell Family Dollar or expand prices at its Dollar Tree stores.
The AP also reported the company is open to testing new prices at Dollar Tree, where most items are priced at a dollar and nothing over that amount, while Family Dollar sells most items for under $10.
In the fourth quarter of 2018, according to the AP, Family Dollar stores that had been open at least a year, reported a 1.4 percent increase in sales — a key gauge of a retailer’s health. Dollar Tree had a 3.2 percent increase for that same time period, the report said.
Although prices are lower at Dollar Tree, in contrast to the stores’ impulse-shopping appeal, Family Dollar attracts a more urban customer shopping for necessities, according to Neil Saunders, managing director of GlobalData Retail.
“Dollar Tree has a much broader customer base, which includes more affluent shoppers,” Saunders wrote. “Visits to a Dollar Tree are not always made out of necessity. A lot of people go there out of curiosity and to see what’s on offer.”
There are four Dollar Trees in Killeen.
Meanwhile, Dollar Tree Inc.’s main rival, Dollar General Corp. reported sales at stores open at least a year rose 4 percent, according to the AP. Revenue grew for Dollar General during the critical holiday period, the report stated.
There are 11 Dollar Generals in Killeen.
Saunders said Dollar General Corp. was able to get more of its customers’ disposable income during the final quarter of 2018, thanks to an increase in fresh and chilled produce in stores and a strong performance from non-food items during the holiday period.
“Overall, we remain impressed by Dollar General’s ability to create a compelling and enhanced shopping experience,” he said.
The retailer, which now operates about 15,370 locations in 44 states, also said it plans to open 975 new stores, according to a report by the AP.