Dollar General executives and directors were hit with a shareholder derivative suit alleging they downplayed staffing struggles and disarray in the retailer’s stores, which resulted in a buildup of unwanted inventory and government investigations.
It is alleged in Tennessee federal court that Dollar General failed to address logistics problems within its stores, including chronic understaffing and cluttered shelves, and also faced investigations in Ohio, Arizona, Louisiana, Mississippi and North Carolina for allegedly charging higher-than-advertised prices.
“As a result of chronic understaffing, employees lacked sufficient time to update merchandise pricing or deal with inventory issues as they arose, especially as the growing inventory on store shelves began piling up, leading to crowded isles and disorganized shelves,” the suit states. “These practices resulted in an uninviting shopping environment which dissuaded consumers from patronizing Dollar General stores.”
Dollar General failed to warn investors that it was not working on fixing inventory issues within its stores, and that it was facing regulatory scrutiny across several states.
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