Discount stores were thriving. How did they stumble?

Blame Walmart — and inflation

black and white illustration of a dollar sign, a family and a house
Walmart and dollar stores tend to cannibalize each other's sales
(Image credit: CSA Images / Getty Images)

Discount "dollar stores" were booming not so long ago, reaching into small towns and urban neighborhoods across the country. No longer: Dollar Tree last week announced the sale of its Family Dollar subsidiary for a fraction of what the company paid to buy the business a decade ago.

Dollar Tree purchased Family Dollar for $8.5 billion. Now Family Dollar is being sold to two private equity firms for $1 billion, "far less" than Dollar Tree originally paid for the chain in 2015, said MarketWatch. What happened? Low-income shoppers "wrestling with inflation" cut back on their spending with the discount chains. But the sector was also plagued with "too many store openings, poorly maintained stores and pricing."

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Joel Mathis, The Week US

Joel Mathis is a writer with 30 years of newspaper and online journalism experience. His work also regularly appears in National Geographic and The Kansas City Star. His awards include best online commentary at the Online News Association and (twice) at the City and Regional Magazine Association.