99 Cents Only Stores Closure Leaves LA Shoppers Scrambling
By Rosie Knight, Columnist
It was with shock and surprise that LA residents learned that the popular discount grocery chain 99 Cents Only would be closing all of its 371 stores nationally. While we still don’t know the exact reasons behind the closures, we do know the impact it will have on our local communities.
99 Cents Only competitors are often big chains that charge far more expensive prices for the same or equivalent items. In San Pedro, the closest option for local shoppers is Vons, which is far more expensive. Taking advantage of their deals to save on staple items requires membership and accessing their digital coupons via an app, excluding an entire demographic without smartphones or the tech savviness to navigate the apps being left out. This is in a supermarket landscape in which area stores have reduced their hours following Vons’ announcement in March that they were shortening their hours to 6 a.m.–10 p.m.
Nevertheless, residents of the Los Angeles Harbor still have Superior Grocers, Aldi, 99 Ranch Market, H-Mart chains and even Tokyo Central, the online Japanese grocery store as viable alternatives. Although they can’t compete with the deals on many shelf items, they do offer a wider range of fresh produce and meats at more competitive prices than the larger corporate chains. But the reality is that the closure of 99 Cents Only stores means that we’re going to see our area become an affordable food desert, especially when it comes to fresh produce, which isn’t available at Dollar Tree and other similar dollar-store competitors.
On April 5, a Friday afternoon, a parking spot was scarce to be found at 99 Cents Only at 10th and Gaffey in San Pedro. That’s because word had spread that the discount grocery store’s liquidation sales had begun, despite the chain only announcing its closure on Thursday of the same week. While it was unclear how significant the sales were with only a few markdowns, from the picked-over aisles to the long lines to the crowded parking lot, the regulars showed up. Many shoppers were just learning of the imminent closure of the chain.
“I only just heard,” Jocelyn, a local resident, told Random Lengths. “I’m surprised, I thought they were doing well.”
That was a common perspective as the company had been opening new stores across Los Angeles in recent years and in the Harbor Area, the discount stores are a grocery staple with three in just District 15 alone and 10 in the wider area.
So what will shoppers do now?
“We’ll just have to adjust,” Jocelyn said while pointing out she’d done just that when her other go-to affordable option, Big Lots, had closed their store on Pacific Coast Highway in Lomita.
In the San Pedro location of 99 Cents Only, the general feeling was one of resignation, with another shopper who preferred not to share his name telling us, that “I shop here all the time,” but when it came to where he’d go next, he wasn’t sure. “I don’t know… It’s private industry, what can you do?”
Councilman Tim McOsker, who represents the 15th District, released a statement showing a clear understanding of the impact the closure of the stores will have on this district’s local communities, explaining:
“Not only are 99 Cents Only stores a lifeline for lower socioeconomic residents providing for their families, but they employ many of our neighbors and community members.”
He said he has been in communication with the City’s Economic Workforce Development Department and has asked them to deploy a rapid response team to aid local 99 Cents Only store workers with a range of resources, including assistance with Unemployment Insurance Benefits, as well as helping them find their next place of employment.
“We will do our best to mitigate the negative impacts of these layoffs and to support the workers, their families, and our communities,”McOsker said.
Shoppers at Lomita’s 99 Cents Only on PCH shared McOsker’s worries.
Margaret, a senior who lives within walking distance of the store, shared her dismay at the closures.
“I wish they could leave some open and not close all of them.” She was most concerned about the staff who were not told of the closures before the announcement.
“These poor people. I’ve known them for years and they’re like family.”
David Gold’s Legacy
It’s especially painful as the founder of 99 Cents Only, the late Dave Gold, had always looked after 99 Cents Only workers before the chain’s sale in 2011. During the chain’s glory days, Gold insisted that all workers be given stock options, from part-time workers to managerial staff, whether they worked the floor or cleaned the shop. His care went beyond that of an employer too as his daughter told the Jewish Journal when he passed in 2013, “[He] liked to advise workers on how to best invest their money, and looked for good deals on houses for them.”
For Margaret, the shop gave her a place to find a variety of food and good produce for prices that didn’t break the bank. While planning to try and replace 99 Cents Only with Dollar Tree in her regular shopping routine, she noted they were also closing local locations. This is an alarming trend, with Dollar Tree announcing it is closing 600 of its Family Dollar store locations in 2024, along with another 370 in the coming years.
Another Lomita shopper, Liz, who lives in Inglewood but works in the area and shops at the Harbor Area 99 Cents Only every week, was absolutely shocked. “I’m really sad,” she said. “I feel like this is like my staple store. I get everything here! It’s just so affordable, whether you want candy or vegetables. And recently I noticed that they started having organic things. So I was like, ‘Oh my God, this is like the best thing ever.'” She was also worried that despite their prevalence she doesn’t feel that Dollar Tree has a comparable selection. “It’s just not the same.”
Private Equity’s Grip: A Pattern of Retail Decline
By Friday afternoon, just 24 hours after the announcement, there seemed to be hope for the SoCal staple as former Big Lots President Mark J. Miller told LA Mag he was hoping to put an investor group together to purchase the SoCal locations of the store. “It’s a passion for me to try and do this deal because I think it’s such an iconic brand name and has such a great feel for Southern California,” Miller explained. But that potential plan was soon complicated by the fact that on Monday, April 8, 99 Cents Only revealed that the franchise had filed for bankruptcy. This isn’t the first time that a store owned by Ares Canada Pension Plan has shut stores and filed for bankruptcy, as in 2020 the same thing happened with Neiman Marcus, a chain that the company had bought in 2013 for $6 billion. That bankruptcy filing led to an investigation about fraudulent asset transfers, but that was settled out of court with creditors in the same years.
Private equity companies buying chains and running them into the ground — and massive amounts of debt — before filing for bankruptcy is a depressingly regular trend, one that has made people like Mitt Romney a lot of money. Reporting at The Atlantic during the Toys ‘R Us closures showcased this back in 2018. “An analysis by the firm FTI Consulting found that two-thirds of the retailers that filed for Chapter 11 in 2016 and 2017 were backed by private equity. ‘Had these companies remained publicly owned,’ [Thomas] Paulson said, ‘they would have had a much higher probability of being able to adapt, to invest, and to withstand’ the ups and downs of the economy.” And in 2024 things have only gotten worse as SPGlobal reported that “private equity portfolio company bankruptcies spiked to record high in 2023.”
As for what the workers impacted can do, The Los Angeles County Board of Supervisors is preparing to craft a report to work out how they may support those who have lost their livelihoods due to the unexpected closures. “I am worried about the thousands of 99 Cents Store workers across L.A. County who are going to lose their jobs, but L.A. County is ready to help,” Supervisor Janice Hahn said in a statement. “We have a department that can step in during an event like this and help workers with not only short-term assistance to get through this difficult time but job training and support to help them get a better job.”