From CNBC: 2024-12-03 07:00:01

Government over allegations that it didn’t fix hazardous conditions in its stores. Dollar Tree has also paid millions in fines for similar violations.

Creedon said on the earnings call that Dollar Tree was making “significant progress” toward resolving these issues. The company has hired more staff and invested in technology to improve the shopping experience.

But the challenges remain. Dollar Tree is expected to report its quarterly earnings on Dec. 5, while Dollar General will follow on Dec. 6. Both retailers will have to convince investors they have a plan to bounce back from their recent struggles and adapt to a changing market. Department of Labor will pay $12 million in penalties for workplace safety violations, in addition to more than $21 million in fines from OSHA since 2017. Dollar Tree settled with regulators in 2023 to improve worker safety after accumulating $13.1 million in fines. Dollar Tree also paid nearly $42 million for rodent-infested warehouse.

Safety violations can deter customers, as messy stores and overworked employees are a turn-off. Dollar Tree struggled during the pandemic to fill jobs, resulting in messy, understaffed stores. Vendors prioritized big-box stores during pandemic, leading to out-of-stocks at dollar stores and driving customers to competitors.

Dollar Tree raised most items to $1.25 during pandemic and introduced merchandise at higher price points like $3, $5, and $7. The multi-price approach is seen as a long-term growth driver. Dollar Tree is positioned as a solution for families feeling financial strain of inflation, especially those without access to grocery stores or pharmacies.

Both Dollar Tree and Dollar General face new risks with proposed tariffs on imports from China under the incoming Trump administration. Dollar General declined to comment on its challenges but is running a “24 Days of Savings” event in December to attract holiday shoppers with daily deals on featured items only available in stores.



Read more at CNBC: Why Dollar General and Dollar Tree are struggling