FAMILY Dollar is adjusting its payment options to better serve low-income customers.
This comes after the chain announced thousands of closures because of financial struggles.
Family Dollar has partnered with Instacart, a leading grocery delivery service, to accept Supplemental Nutrition Assistance Program’s Electronic Benefit Transfer (SNAP/EBT) payments for online orders.
The new partnership allows SNAP/EBT users to shop for eligible items on Family Dollar’s mobile app, storefront page, and on Instacart’s website and app.
Through this collaboration, SNAP customers can benefit from same-day delivery.
“Family Dollar takes great pride in delivering quality and value on family essentials through our convenient locations across the country,” said Larry Gatta, Chief Merchandising Officer for Family Dollar in a press release.
“Now, through our Instacart partnership, that convenience extends even further to our customers with same-day delivery on SNAP-eligible items.”
Sarah Mastrorocco, Vice President and General Manager of Health at Instacart, also spoke on the partnership.
“Now, nearly 98% of SNAP households can shop for groceries and essentials on Instacart with fast, same-day delivery,” he said.
“By expanding our partnerships with retailers like Family Dollar, we’re making it easier for families to get what they need from their preferred stores.”
CLOSURES AND STRUGGLES
This move comes during a turbulent time for Family Dollar, which recently announced the closure of nearly 1,000 stores.
Similarly, 99 Cents Only, another major player in the discount retail space, is going out of business altogether.
Both companies cited inflation and increased shoplifting as significant contributors to their financial struggles, squeezing profits and affecting operations.
While these challenges have impacted dollar store chains, analysts point to long-standing strategic issues.
Family Dollar, which has approximately 8,000 locations across the country, has faced ongoing difficulties since its acquisition by Dollar Tree in 2015 for $8.5 billion.
The acquisition was intended to help Dollar Tree compete against larger rivals, but the integration has been rocky.
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Food stamps are a voucher issued by the US government to low-income communities that can be exchanged for food and products.
The SNAP program is available in all 50 states, with benefit amounts varying depending on an individual or family’s income, size, and other expenses.
According to Neil Saunders, managing director of GlobalData, Dollar Tree misjudged the deal, leaving Family Dollar as a burden on its parent company.
“Basically, almost ten years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around,” Saunders explained in a note to clients.
Despite renovating thousands of stores in recent years, Family Dollar continues to struggle with maintenance issues, with many locations still in poor condition, according to CNN.
Earlier this year, the retail chain was hit with a record $41.6 million fine by the Justice Department for violating product safety standards.
This penalty followed reports that items were sold from a rodent-infested warehouse in West Memphis, where live and decaying rodents were found.
However, Family Dollar executives remain optimistic.
The company, now under a new CEO and management team, has been taking steps to improve.
These include lowering prices to attract more customers, expanding private-label brands, and investing in supply chain improvements.
“While we are in the early stages of our transformation journey under our new management team, we are proud of the progress we’ve made to date, and see a long runway for growth ahead for our business,” said a company spokesperson.
CEO Rick Dreiling echoed this sentiment, stating that a “well-run and well-located Family Dollar store is a powerful retail force.”
