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Dollar General suddenly shuts five stores in major city - but not because they are underperforming
Dollar General is quietly shuttering a handful of stores in the same city - but not because they are underperforming.
The five closures, which will happen this month, are all located in New Orleans East.
Chains often decide to pull the plug on underperforming brick-and-mortar stores to prevent them hemorrhaging cash through rent and staff wages.
However, one retail expert argues that the stores on the chopping block did not fall into this category - but instead are victims of oversaturation.
This can occur when too many of the same chain, or similar rivals, are found in too small of an area.
Despite reports of the closures Dollar General is performing well financially
'The problem with the dollar stores has been the oversaturation, the proliferation, but they do serve a purpose,' Tangee Wall, head of nonprofit neighborhood group New Orleans East Matters.
'They are needed,' she told the U.S. Sun.
The Nashville-based chain has not yet formerly confirmed the closures - which are a small dent in its 20,000 overall stores.
It comes weeks after the company was forced to pay out $12 million in a legal settlement.
The company agreed to the settlement with the Department of Labor in June after it was found to have breached several workplace safety rules.
Several locations were found to have blocked exits, given improper access to fire extinguishers and electrical panels and improper material storage.
Despite the setback, Dollar General has been performing well financially.
Earlier this summer it announced plans to open a further 730 locations.
The company will also renovate 1,500 of its stores.
It comes as other retailers have cut back, including Dollar General's rival Dollar Tree.
The stores being closed are reportedly all in New Orleans East
Dollar General has 20,000 stores in its bricks-and-mortar fleet
Dollar stores have long been selling items above $1 after years of inflation
Dollar Tree, which owns Family Dollar, was forced to close nearly 1,000 stores in March.
Around 600 Family Dollars will close in the first half of this year, and about 370 of its flagship Dollar Tree locations will shutter over the next several years.
For years, dollar stores haven't truly been dollar stores, with many of them selling items for far more than $1.
California-based 99 Cents Only announced in April that it would be closing all 371 locations after being in business for decades.