Discount Grocer 99 Cents Only Stores Closing All Locations

The retail landscape is undergoing a significant transformation as 99 Cents Only Stores, a long-standing fixture in the discount grocery sector, announced it will shutter all 371 of its locations. The company, which operated primarily across California, Texas, Arizona, and Nevada, revealed that it has begun an orderly wind-down of its business operations. This move marks the end of a brand that has served budget-conscious shoppers for over four decades.

In a statement provided to the public, the company’s interim CEO, Mike Simoncic, cited several complex and lasting challenges in the retail environment as the primary drivers behind the liquidation. Among these hurdles are the lingering impacts of the COVID-19 pandemic, shifts in consumer demand, rising levels of retail shrinkage, and persistent inflationary pressures. These factors combined to create a financial situation that the leadership team concluded was no longer sustainable.

To facilitate the closure, the company has entered into an agreement with Hilco Global to liquidate all merchandise currently in stock. Additionally, the retailer is selling its real estate assets, along with its store fixtures and intellectual property. The closures are expected to result in thousands of job losses across the four states where the chain operated. For loyal customers, the news represents a loss of a reliable resource for affordable groceries, household goods, and seasonal items during a period when the cost of living remains a major concern for many families.

Industry analysts note that 99 Cents Only Stores is not alone in its struggles. While the discount retail sector generally performs well during economic downturns, the specific business model of deep-discount grocers is facing intense pressure. Rising costs in the supply chain, including higher expenses for logistics, labor, and inventory, have squeezed profit margins. Even as consumers look for ways to stretch their budgets, retailers must balance these lower price points with the increasing costs of running brick-and-mortar storefronts.

Furthermore, the retail industry is currently grappling with a rise in "shrink," a term used to describe inventory loss due to theft, administrative error, or vendor fraud. Increased security costs and lost inventory have weighed heavily on the bottom lines of many national chains. For a company like 99 Cents Only, where margins are already razor-thin, these mounting operational costs became insurmountable.

This liquidation follows a pattern of consolidation and closures within the discount retail space. While some larger competitors with massive economies of scale—such as Dollar General or Dollar Tree—have managed to adapt by diversifying their product offerings and increasing their footprint, smaller or regional players are finding it increasingly difficult to compete. The closure of 99 Cents Only serves as a stark reminder of the volatility currently facing the retail sector.

As the company prepares to exit the market, shoppers have begun visiting local stores to take advantage of remaining inventory before the doors lock for the final time. The company has expressed gratitude to its employees and the communities it served for their years of support. For the retail industry, the disappearance of this chain marks a definitive shift, leaving a gap in the market that competitors will likely scramble to fill. As the broader economy continues to navigate inflation, the story of 99 Cents Only highlights the fragility of retail models that rely on high volume and extremely low margins in a changing economic climate.

This is not financial advice.