The Closure of the 99
By Eve Scolari
To the dismay of many shoppers, the 99 Cents Only stores will be closing their doors. Founded in 1982, this chain of stores has approximately 371 stores nationwide, located in California, Texas, Arizona and Nevada.
The reasoning behind this closure may serve as a shock to some. Mike Simonic, the Interim Chief Executive Officer of the chain explained that recent years have presented vast challenges in the retail environment. Some of the few reasons he mentioned were rising levels of shrink, which refers to loss of inventory due to shoplifting, employee theft and administrative errors. Not only this, but he also pegged it on the shift in consumer demand and persistent inflationary pressures, all of which are forces that have "hindered the Company's ability to operate."
The 99 Cent Only stores have served as places for individuals seeking budget-friendly and inexpensive products to shop. Each store had generally the same items, though certain stores varied in quantity. They sold products ranging from health and beauty supplies to groceries, as well as tools and household items.
However, the company diligently sought out a way to keep their stores alive through an "extensive analysis of all available and credible alternatives" with their financial and legal advisors, according to KTLA. They ultimately came to the conclusion that the best course of action was "necessary and the best way to maximize the value of 99 Cents Only Stores' assets."
The price of inflation is to blame for this. The stores sold their items at only 99 cents until 2008, when the economy forced the prices to rise. Although the inflation rate is not as high as it was in 2022, which peaked at around 9.1% in June, it is a far cry from what it was in years prior.
The annual inflation rate in February 2024 was 3.2% as opposed to the rates a few years prior in 2020, where it peaked at around 1.23%. This rate has spiked significantly to the point where vastly successful chains of stores, such as the 99 Cent Only Stores, are being forced to shut their doors. This is a massive blow to those individuals who frequently shop there to find budget-friendly prices.
Additionally, the 99 Cent Only Stores are not the only chain that is suffering. It was announced recently that around 600 Family Dollar stores will be closing in 2024 alone, and most likely an additional 370 in the next few years, according to the LA Times.
All hope is not to be lost, however. The former Big Lots president and CEO of Pic 'N' Save Bargains, Mark Miller, wishes to save the 143 99 Cent Store locations in Southern California. Miller told ABC 7 Eyewitness News that he put together a group of investors in an attempt to acquire the Southern California stores and "continue the chain's commitment to the community," with this group of investors including former 99 Cents Store executives. He hopes that a deal is able to come together soon.
Furthermore, not only does this closure affect shoppers, but employees are impacted as well. The 99 Cents Store chain has approximately 14,000 workers. According to ABC 7 Eyewitness News, Los Angeles City Councilman Tim McOsker had asked the city's Economic Workforce Development Department to arrange a response team to provide the employees with a range of resources. These resources will assist with unemployment insurance benefits, as well as help with finding new jobs for these employees.
The 99 Cent Only Stores' sales officially begin on April 5th. According to KTLA, the chain made an agreement with Hilco Global to liquidate all of its merchandise. This deal included the disposal of certain furnishings, fixtures and equipment at each of the stores nationwide.
While this recent closure announcement has devastated shoppers all over the country, it is possible that some of these stores can be saved. With the inflation rates skyrocketing through the years, retailers are suffering blows to their selling. Despite the fact that we as citizens cannot directly change this, we should seek to offer support and care to these companies and former employees in such a time of hardship.