Jul 22, 2022 - Economy

Family Dollar struggles with "problem child" woes

A car drives buy a store in a parking lot

Family Dollar has issued a voluntary recall of hundreds of products. Photo: Daniel Acker/Bloomberg via Getty Images

Family Dollar issued another sweeping recall stemming from logistical problems, which suggest the chain hasn't fixed its systemic challenges.

Why it matters: Family Dollar's woes were exposed earlier this year, when the FDA discovered a devastating rat infestation at one of the retailer's distribution centers in Arkansas.

  • It was so bad the chain had to issue a huge recall and temporarily close 404 stores, before eventually deciding to shutter the troubled hub permanently.

Of note: Months later, Dollar Tree cleaned house, with the CFO, COO, CIO, chief strategy officer and chief legal officer all departing.

  • Their departures came after the company reported a same-store sales decline of 2.8% in its most recent quarter; meanwhile, Dollar Tree was up 11.2%.
  • "There is a lot of sloppiness and dysfunction within Family Dollar," GlobalData Retail analyst Neil Saunders wrote recently, calling the brand a "problem child."

What they're saying: Dollar Tree did not respond to Axios' request seeking comment.

  • But in May, the company said in a statement that it's making investments to improve the "capabilities and efficiency of its supply chain," with a focus "on delivering improved safety, conditions and operational standards.
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