Dollar Stores Split: Nearly 700 Stores Closed, Affecting Iowa, Illinois, and Wisconsin

It’s the end of the line for Dollar Tree’s bumpy ride with Family Dollar, and shoppers across Iowa, Illinois, and Wisconsin are already noticing the fallout. Dollar Tree is cutting loose its Family Dollar brand, selling it to private equity firms Brigade Capital Management and Macellum Capital Management for $1 billion. That's an extremely sharp drop from the $9 billion it spent acquiring the chain in 2015.

This sale comes amid sweeping closures, with nearly 700 Family Dollar stores already shuttered last year, including many in the tri-state area. Plans were still to close over 900 stores in total when it was put up for sale, according to CNN. The move aims to let Dollar Tree focus on its flagship brand, but it leaves questions about how the sale will reshape both retailers moving forward.

A Hit to Local Access and the Future

Family Dollar stores have long been a staple in rural communities, providing low-cost essentials from food to toiletries. But issues like cluttered aisles, rising prices, and fierce competition from rivals like Dollar General and Walmart hurt its performance. Inflation added to the chain’s woes, and shoppers noticed.

As more Family Dollar locations close, particularly in small and rural towns, some customers are left without a convenient, affordable option for everyday needs. For many, especially those of lower income, this means longer drives to stock up on essentials.

The sale places Family Dollar in the hands of private equity investors, who will likely weigh whether to invest in revitalizing the remaining stores or continue trimming the chain’s footprint. Renovations and store improvements have been ongoing in recent years, but Family Dollar’s future direction will depend on how its new owners prioritize profitability and how the brand is run.

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Dollar Tree’s Own Challenges

While Dollar Tree is offloading Family Dollar to streamline operations, it still faces challenges of its own. Inflation and rising costs have pushed the company to raise its base prices, moving from its signature $1 to $1.25 in 2021. There’s even talk of introducing higher-priced items to maintain margins.

In larger cities like Chicago, Des Moines, and Madison, Dollar Tree aims to expand and strengthen its brand, focusing on suburban and urban markets, as well as lower-income adjacent neighborhoods. However, for rural areas that are losing the stores, the company's shift is simply a loss.

In all honesty, the entire dollar-store sector has been under pressure. Low-income customers increasingly struggle to afford even basic items. Meanwhile, these chains are competing with bigger players as more and more people become budget-conscious shoppers, and ultimately, they're often failing.

The split between Dollar Tree and Family Dollar marks a major shift in the discount shopping scene. Whether Family Dollar finds new footing under private ownership or continues to close stores remains to be seen. For now, the main impact can be seen in small communities as closures limit options for local shoppers.