Economist calls 99 Cents Only store closures scary
SACRAMENTO - All of the 99 Cents Only stores across the nation, more than 300 stores, are closing down for good.
This is going to impact families who shop there often for low prices and also those who work there.
Everything in the store is 30% off right now, so you can imagine how many people are going in and out of 99 Cents Only stores throughout Sacramento.
The doors really never closed and people were waiting outside for carts, grabbing whatever they could carry.
While customers are embracing and stocking up on items, economists say this is a scary sight for many.
"Sad. I can't buy my apples and bananas anymore," said one man walking into the store.
"I think people are going to miss it," said another, walking out with as much as he could carry.
Whether it was walking in with their own carts, or leaving with their hands full, shoppers in South Sacramento are bummed about losing this 99 Cents Only store on Florin Road.
"Little bit of this and a little bit of that," the man said.
"It's usually busy but not like this, this is over-busy," said Bryan Crough.
Crough remembers when this store first opened its doors and how vital it was to the community here.
"This neighborhood, it was a good store. This needed to stay here, and now it's going to be gone," said Crough.
The company announced Thursday, that all of its stores, nearly 400 across four states would start liquidation, before eventually closing for good, leaving many customers with fewer options for shopping.
It's also leaving all of their employees without a job.
"It's really upsetting," said one employee named Chrissy. "For the people who have families, rent, mortgage. So they're pretty much saying, well we'll get out money, not yours."
"This is pretty scary," said Dr. Sanjay Varshney, a finance professor at Sacramento State.
He said this growing trend of bargain stores closing is troubling.
"Given that the cost of living in California already is very high," said Varshney. "If these stores shut down in the very neighborhoods where they were very popular at one time, it is going to have a major impact on those neighborhoods."
So why are they shutting down? Dr. Varshney feels lack of regulations is to blame.
"Try and raise the prices on goods and services because you are raising the salaries and the cost of production, they are simply going to pass it onto the consumer," he said. "A store like 99 Cents Only cannot survive on those low margins."
The employees inside told CBS13, that they are not getting severance pay when they will be laid off. They received a 60-day notice for layoff, in accordance with the WARN Act.
CBS13 reached out to 99 Cents Only stores to try and get confirmation on the severance pay claims.
They did not get back to us in time for this story.
Varshney said they are a private company, and legally, follow the guidelines to give severance pay or not.