The discount chain 99 Cents Only Stores is closing its doors.
The retailer, which has 371 stores in California, Texas, Arizona and Nevada, announced Thursday that it was ending its retail operations.
It will liquidate all its stores and will also sell its real estate.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” Mike Simoncic, the company’s interim CEO, said in a statement.
The chain sells a range of items including fresh produce, pantry items, home goods and beauty products. He also sells products from big brands — those featured on his website include Nivea, Lego and Heinz — which he says he gets from big-box stores that over-order.
Some 99 Cents Only Stores products are obtained through liquidation agreements. The company has its own fleet of trucks “to reduce costs”.
The chain, which opened its first store in Los Angeles in 1982, initially charged 99 cents for most of its items.
Over the past two decades, the company has deviated from this price “to offer our customers a broader assortment of extreme value products and products and also to keep pace with rising operating costs,” did he declare.
In 2008, the price of 99 cent products was increased to 99.99 cents. “In almost all cases, this price was rounded up to a dollar at checkout, and since then, this is the amount a customer will be charged for merchandise at that price level,” the company said.
She said that over the years she has also increased the number of products sold for more than a dollar.
Other discount chains have also struggled to keep prices low. Dollar Tree — the last of the three major U.S. dollar store chains to stick with $1 — moved away from the price in 2021.
The pandemic, shrinkage and inflation
Simoncic, who will step down from the role, cited factors including the pandemic, changing consumer demand, increasing shrink levels and ongoing inflationary pressures as hampering the company’s ability to operate.
The pandemic has caused major changes to the way people shop, with a sharp increase in online shopping. Recent years have also been characterized by high inflation, which has driven up operating costs.
The company said it had conducted a “thorough analysis” of ways to continue operations. “After months of actively pursuing these alternatives, the Company ultimately determined that an orderly liquidation was necessary and was the best way to maximize the value of 99 Cents Only Stores’ assets,” he added.
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