(Update: 99 Cents Only Stores subsequently filed for bankruptcy, with plans to close all stores by the end of next month. Among the reasons cited in the bankruptcy declaration was the higher cost of doing business, which “the company had no choice but to pass on to its customers… in the form of higher prices, which was met by significant customer resistance and reduced customer traffic.” The number of products actually priced at “99.99 cents or less” had dipped below 50% last year.
The bankruptcy now complicates a last-ditch effort to save at least some of the stores. A group of investors led by Pic ‘N’ Save Bargains CEO Mark Miller had hoped to acquire the 143 Southern California locations and keep them in business. The group is still hopeful, but they will now need to pursue a deal through a bankruptcy court-supervised process, with no guarantee of success.)
It’s been generations since five-and-dime stores died out, and decades since dollar stores took their place. Now, it appears dollar stores’ days are coming to an end as well.
The last major dollar store chain still actually selling a majority of items for a dollar says it won’t be doing so for much longer. It’s not raising prices, though – instead, it’s going out of business altogether.
The owner of the California-based 99 Cents Only Stores announced Friday that, effective immediately, it has begun “an orderly wind-down of its business operations,” permanently closing all 371 of its stores in California, Nevada, Arizona and Texas.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” interim CEO Mike Simoncic said in a statement. But “the last several years have presented significant and lasting challenges in the retail environment.”
Compared to the thousands of Dollar Tree, Family Dollar and Dollar General stores across the country, 99 Cents Only had a relatively modest presence in a small part of the country. But it was unique, in that it strenuously resisted price hikes that its competitors ultimately embraced.
Dollar General and Family Dollar gave up their status as true “dollar stores” ages ago and now offer products across a wide range of prices. Dollar Tree finally relented a few years ago, raising its base prices to $1.25. Even the much smaller regional chain Mighty Dollar, with just a handful of stores in North Carolina and Kentucky, held out until 2022, when it too raised its base prices to $1.25.
99 Cents Only raised its prices as well in response to inflation, way back in 2008 – but only by a fraction of a cent. Instead of 99 cents, its base price became 99.99 cents. Don’t have 99/100th of a cent in your pocket? No worry. “In almost all instances, this price rounded up to one dollar at the register,” the retailer explained, but it allowed the stores to remain true to their name, for the most part. In subsequent years, the retailer added more items priced at more than a dollar, but steadfastly stuck with the 99.99-cent opening price point for the majority of its items.
As 99 Cents Only’s competitors found, though, it became difficult offering products at such a low price that shoppers actually want to buy, without skimping on size or quality. That was especially difficult for 99 Cents Only, which has a greater focus on grocery and food items than its competitors. A previous CEO once said “we’re not a dollar store, we are an extreme value retailer,” more akin to a Grocery Outlet or ALDI than a Dollar General.
So 99 Cents Only may not have been a true dollar store in the strictest sense. But what store is these days? In the strictest sense, none of them are dollar stores because none of them sell everything for a dollar anymore. There are local, independently-run stores that still do, but they often prove the point that you get what you pay for.
Shoppers at 99 Cents Only stores now have precious little time to get their 99.99-cent bargains, at going-out-of-business discounts of up to 30% off, so far. It turns out even the “rounded up” one-hundredth of a cent that every customer technically overpaid for every item all these years, wasn’t enough to keep this chain from zeroing out.
Image source: 99 Cents Only Stores/Facebook
