Goodbye to Family Dollar stores: hundreds more Dollar Tree stores to close across the US

Family Dollar stores are about to become a lot less familiar in American neighborhoods. Dollar Tree is closing more than 1,000 Family Dollar stores as part of a major retreat from a troubled acquisition that never quite delivered. It’s selling off the struggling brand in a $1 billion deal to private equity firms Brigade Capital Management and Macellum Capital Management, marking the end of a rocky decade under Dollar Tree ownership.

The move affects about 970 Family Dollar locations, either already closed or set to shut when leases expire, plus 1,000 combo stores where Family Dollar and Dollar Tree shared the same roof. Altogether, more than 1,900 stores will be impacted, a massive shift for lower-income communities that relied on the chain’s affordable basics.

Why is Dollar Tree cutting ties with Family Dollar?

Dollar Tree bought Family Dollar in 2015 for $9 billion, hoping to compete more aggressively with rivals like Dollar General and Walmart. But inflation, online discount sellers like Temu and Shein, and years of internal dysfunction chipped away at the plan.

Family Dollar stores became synonymous with cluttered aisles, expired products, and a major federal fine over a rat-infested warehouse in Arkansas. Last year, it paid over $41 million to settle with the Department of Justice after it was found to have distributed food, medicine, and cosmetics from the contaminated site.

All that damage added up and Dollar Tree officially started exploring a sale or spinoff last summer. It found its buyers this spring, and now hopes to finalize the deal by June 2025.

What happens to your local store?

The cities impacted haven’t been fully revealed yet, but with over 7,000 Family Dollar locations across the U.S., the effect will likely be felt nationwide. Many of the store closures are in areas where Family Dollar overlapped with better-performing Dollar Tree stores – or where lease renewals no longer made financial sense.

A small number of Family Dollar stores may survive under new ownership. Brigade and Macellum have said they plan to run Family Dollar as a standalone company with a renewed focus on the communities it serves. Whether that means fewer rats and more customers remains to be seen.

The flip side of this deal is Dollar Tree’s big bet on itself. Stores are being remodeled to handle items up to $7 instead of the $1.25 cap. Dollar Tree recently snapped up 170 leases from bankrupt 99 Cents Only Stores in Arizona, California, Nevada, and Texas. It plans to open 300 new locations in 2025.

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