Family Dollar plans to close 370 stores, cut back on opening new locations and lower prices on about 1,000 items. The efforts are designed to save $45 million annually while helping to put the chain in a more competitive position.
The nation's second largest dollar store chain made its plans public following a fiscal second quarter in which sales fell 6.1 percent.
"We are not satisfied with our results, and we hold ourselves accountable for improving our performance," said Howard Levine, chairman and CEO of Family Dollar, in a statement.
In addition to store closings, which represent about five percent of the chain's total, Family Dollar announced it would open between 350 and 400 new stores in its fiscal 2015, down from the 525 in its 2014 fiscal year.
"Our mission is to deliver compelling, everyday values for our customers, and executing on this promise requires an unwavering commitment to being a low-cost operator. We are taking a number of important steps through our immediate strategic actions to improve our operational efficiency and deliver better financial returns," said Mr. Levine.
Brian Yarbrough, an analyst with Edward Jones, told the Charlotte Observer that sales per square foot at Family Dollar were $180, compared with $210 at rival Dollar General.
Analysts at Bloomberg News estimate that revenues at the chain will increase 1.7 percent this fiscal year compared to 11 percent last year.