Family Dollar (parent company Dollar Tree Inc,
The conditions that FDA inspectors found at Family Dollar's West Memphis facility were disgusting, to say the least. Inspectors reported a rat infestation, the presence of living birds nesting in the facility, long-dead and rotting rats and birds in the open, and all manner of related bodily waste. Inspectors also noted gnaw marks on boxes and found a paper trail indicating that the infestation had been a longstanding problem.
The company announced the recall in a BusinessWire release late last week.
"There are numerous hazards associated with rodents including the potential presence of Salmonella. Use or consumption of affected products may present risk of illness due to the potential presence of Salmonella, an organism which can cause serious and sometimes fatal infections in infants, young children, frail or elderly people, pregnant persons, persons with [pre-existing conditions,]" Family Dollar wrote. "To date, Family Dollar is not aware of any consumer complaints or reports of illness related to this recall."
It is worth noting that, despite receiving no complaints of product-related illnesses, it was a consumer complaint that brought the FDA's attention to the warehouse conditions in the first place.
The mass closure of so many stores and the reputational damage of the recall comes at a pivotal time for both Family Dollar and its parent, Dollar Tree, as well as consumers.
The steady upward trajectory of inflation over the last two years of pandemic and international political discord has pushed many more Americans to set stricter budgets and turn to dollar stores more often to stay afloat. The significant uptick in traffic has already driven Dollar Tree and Dollar General
Family Dollar is set to close hundreds of stores as inflation reaches new heights and many consumers are even more likely to turn to cheaper retail stores. Store closures could drive consumers to competitors, especially as some learn of the reason for the closing and opt to find a new chain. Further fueling the reputational dangers to the company is the response by many state and local representatives, who have taken to social media to warn constituents and call for further investigations.
Dollar Tree investors were spooked on the news as trading got off to a delayed start this week due to President's Day. Shares dropped hard on Tuesday morning and hadn't shown much improvement by noon, remaining down 1.1%.