We rely on our local dollar stores for everyday necessities at a low cost, with millions of Americans flocking to their local Family Dollar. The company has been providing products to communities throughout the U.S. for more than 60 years now. But despite all the help Family Dollar has offered shoppers for decades, the dollar store chain has been embroiled in a significant controversy recently, resulting in a federal investigation and a major lawsuit. Now, Family Dollar is getting rid of something permanently as a result. Read on to find out what the company is doing now.
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Family Dollar was recently at the center of an FDA investigation.
iStockOn Feb. 18, the U.S. Food and Drug Administration (FDA) revealed that it had been investigating a Family Dollar distribution facility in West Memphis, Arkansas, since January because of a consumer complaint. According to the agency, its inspection revealed a number of unsafe and unsanitary conditions, including a major rodent infestation.
"Specifically, during this inspection we observed rodent evidence, including live rodents, dead rodents of various states of decay, rodent excreta pellets (REPs), gnawings, nesting, and odors indicative of rodents throughout the entirety of your facility including areas where human food is routinely stored," the FDA wrote in a report issued to the facility.
That same month, Family Dollar issued a voluntary recall for specific products shipped by the facility to more than 400 stores throughout six states and temporarily closed these locations to help carry out the recall. But the company started gradually reopening those stores in late February, and its distribution facility was also reopened then—although the center was "operating at a limited capacity" and "working on a remediation plan," according to Insider.
The company will be closing the facility permanently soon.
ShutterstockFollowing the investigation, Family Dollar has now decided to shut down the distribution center entirely, The Hill reported. On May 18, the company told employees that it will be closing its facility in West Memphis permanently. According to a letter sent from Family Dollar to West Memphis Mayor Marco McClendon, the center will shutter on or around July 17. Randy Guiler, the vice president of investor relations for Dollar Tree, Family Dollar’s parent company, told the New York Post that the center will continue shipping to stores until the end of June, and then it will transfer its inventory to other distribution centers.
"Like most companies, we regularly assess our operational footprint to ensure we are running our business in the most effective and responsible way. As a result of that process, we determined the nearly 30-year-old facility in West Memphis would not be adequate to allow us to continue serving the needs and requirements of our stores and customers served by the distribution center," Guiler said in a statement.
Family Dollar was just hit with a lawsuit over the distribution center.
ShutterstockThe announcement of the facility closure comes just weeks after the state of Arkansas filed a lawsuit against Family Dollar and Dollar Tree. Arkansas Attorney General Leslie Rutledge filed the suit on April 28, claiming that Family Dollar had been aware of the rodent infestation at least two years before the FDA investigation and knowingly sold potentially contaminated products to shoppers.
According to the lawsuit, the companies demonstrated a "troubling pattern of willful and intentional neglect and deceptive and unconscionable business practices." But despite Rutledge calling for an official withdrawal of the company's authorization to conduct business in the state, the attorney general spoke out against Family Dollar's decision to shut down the center instead of fixing its problems.
"Family Dollar is punishing hundreds of hardworking Arkansas families instead of cleaning up the company’s own, illegal business practices that put their employees and consumers at risk," Rutledge said in a May 18 statement to the New York Post. "Family Dollar should eliminate deceptive and dangerous conduct."
Hundreds of workers in the city will be out of a job when the facility closes.
iStockMcClendon said that Family Dollar was one of the city's largest employers, making the shutdown shocking and frustrating. "We reached out and we offered any resources that we could … we even reached out with our animal control department or any services we felt could be accessible to them … so that this decision would not happen but honestly it looked like this thing was in the making once the lawsuit from the state came in," he told The Hill.
When the center officially closes in July, 230 employees will be let go from the company, The Hill reported. Then another 90 employees will be separated from the company on Oct. 15 as a result of the shutdown. But according to Guiler, eligible employees will receive a severance package from Family Dollar.
"This was a difficult decision we did not take lightly, especially because of our outstanding team in West Memphis, our relationship with the community, and the partnership we have had with the State of Arkansas since 1994," he said. "We are committed to treating impacted associates fairly and respectfully, and we are doing everything we can to support them with their transitions, including providing severance plans to those who are eligible, as well as offering outplacement services and employee assistance programs."
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