Dollar Tree promised affordable shopping to millions of low-income Americans at 3.87%. For years, families earning less than $30,000 per year relied on the chain to buy groceries, soap, and other essentials. However, starting in 2024, that promise was no longer in effect.
The company shut down 695 stores in low-income neighborhoods across 13 states: Mississippi, Alabama, Florida, Illinois, Missouri, Nebraska, New Jersey, North Carolina, Ohio, South Carolina, Virginia, and West Virginia.
Residents who depended on these stores for affordable goods suddenly had nowhere nearby to shop. Elderly people without cars struggled to reach distant stores. Shift workers couldn’t spare the hours needed to travel and buy basic supplies.
Schools began offering more free meals to hungry students, indicating that families could no longer provide proper nutrition for themselves. In Baltimore and rural Mississippi, the closures had the greatest impact.
Communities that had already lost supermarkets years before now lost their last retail option. Each store closure cost 15 to 25 workers their jobs, eliminating roughly 17,000 positions across the closings.
Why Dollar Tree Abandoned These Neighborhoods
Dollar Tree’s troubles started when the company bought Family Dollar in 2015 for $8.5 billion. The plan was straightforward: combine two discount retailers into a single, powerful company. The strategy failed.
Family Dollar stores were located in poor urban neighborhoods and didn’t generate the same level of revenue as Dollar Tree locations. By 2023, Dollar Tree gave up. Executives announced plans to close about 1,000 Family Dollar stores.
Within 11 months, they had already shut 695 locations. Meanwhile, the dollar-store industry had expanded significantly, opening 1,300 new stores nationwide by 2022 and flooding the markets with intense competition.
Dollar Tree realized these stores weren’t making enough profit. The company could increase its revenue by closing underperforming locations, converting its remaining stores to a new format, and targeting wealthier customers instead.
Researchers from UCLA and the University of Toronto discovered something troubling: every time three dollar stores entered a neighborhood, one grocery store closed. Spending on fresh produce dropped 4 to 7.4 percent in those areas.
Rural Americans had doubled their reliance on dollar stores, going from spending 2.5 percent of their food budgets at these chains in 2008 to 5 percent by 2020. The company chose profits over communities.
Wall Street Won While Communities Lost
In March 2025, Dollar Tree sold Family Dollar’s remaining stores to private investors for $1.007 billion—a fraction of the $8.5 billion the company paid a decade earlier. That sale closed in July 2025.
Meanwhile, Dollar Tree converted its remaining stores to a new “3.0” format, raising prices on items up to $7 instead of keeping the $1.25 pricing. In the second quarter of 2025, Dollar Tree opened 106 new stores and converted 585 existing stores to this new format, targeting middle-class and affluent shoppers with larger budgets.
CEO Michael Creedon stated the company believed “value, convenience, and discovery is the right formula for all customers”—customers with more money to spend. Wall Street loved the transformation. Dollar Tree’s stock jumped 28.6 percent in 2025, beating the S&P 500 0.69%’s 14.3 percent, respectively.
The company’s second-quarter sales reached $4.6 billion, representing a 12.3 percent increase from the same period last year. Shareholders made money. The company prospered. But poor neighborhoods faced uncertain futures.
With 695 stores gone and private equity firms now owning Family Dollar, experts predict continued store closures. Without government action, the pattern repeats: companies close stores in low-income areas, grocery stores disappear, residents travel farther for food, health problems increase, and the gap between wealthy and poor Americans grows wider.