Deep discount retailer Family Dollar announced on Thursday it will begin laying off workers and closing 370 stores nationwide after suffering a 35% drop in profits last quarter. Analysts cite competition from Dollar General and Dollar Tree as contributing to Family Dollar’s cost-cutting move. In response, Family Dollar says it plans to lower prices on 1,000 items to remain competitive with its price sensitive lower-income customers. “We are not satisfied with our results, and we hold ourselves accountable for improving our performance,” Chief Executive Howard Levine told the Wall Street Journal. “To that end, we have initiated an in-depth business review to identify opportunities to strengthen our value proposition, increase operational efficiencies and improve financial performance.” Reuters notes that Family Dollar’s customers “live paycheck to paycheck” and its higher prices have made “customers balk” as shoppers have sought deeper discounts elsewhere amid the bleak U.S. economy. The Journal concludes, “The discounter’s customers have remained under pressure from a sluggish economy, which has weighed on sales of more discretionary items.” More