Shoppers of the 99 Cents Only chain are about to see a (very) little bit of inflation.
Dollar Tree has announced it has acquired the leases for 170 of the bankrupt competitor’s locations in Arizona, California, Nevada, and Texas. (99 Cents Only filed for bankruptcy in April and announced plans to close all 370 locations across the country.)
“This was an attractive opportunity to secure leases in priority markets where we see strong profitable growth potential,” said Michael Creedon, Jr., Dollar Tree’s chief operating officer in a statement. “The portfolio complements our existing footprint and will provide us access to high quality real estate assets in premium retail centers, enabling us to rapidly grow the Dollar Tree brand across the western United States.”
The conversion of the stores from 99 Cents Only to Dollar Tree will begin this fall, the company said.
For shoppers, it’s going to be a bit of a transition, though. 99 Cents Only carried a number of groceries, while Dollar Tree’s selection of those is limited. 99 Cents Only cited “inflationary pressures and other macroeconomic headwinds” and increasing levels of “shrink,” the retail code name for theft, as the reason for its closure.
The dollar store retail category has had to make many adjustments in the past year to keep up with rising costs. Dollar Tree, in March, announced it was increasing its top-level price on items from $5 to $7 as part of its “multi-price expansion strategy”.
Theft is a larger retail problem. Dollar General announced plans earlier this year to completely remove the self-checkout stations in 300 locations and has begun converting some or all of the registers in another 9,000 stores.
Almost one-third (31%) of Generation Z shoppers have admitted to shoplifting from self-checkout kiosks, according to a November LendingTree survey of 2,000 U.S. consumers. (Just 15% of shoppers overall admitted to the habit.) Almost half of Gen Z participants (46%) said they plan to steal the most expensive item in their cart, while 37% said they will forego paying for basic items, like food and water.
