Another ingredient in Family Dollar's success was its efficient distribution system, handled entirely out of Charlotte, from which the company was able to make bulk deliveries to its stores. In , the size of the distribution center was doubled so that the company could take further advantage of discounts on single, bulk deliveries, as well as open new stores without concern about stock shortages.
Although Family Dollar was branching out geographically at this time, with 70 to 80 outlets in Georgia, it was still primarily a Carolina chain. Soon, the company began investigating further opportunities in Alabama, Tennessee, the Virginias, Florida, Kentucky, and Mississippi.
Because the company had no long-term debt--despite the recent Top Dollar stores acquisition--the cash flow freed Family Dollar to expand without too much risk in borrowing. In fact, it opened 33 new stores between September and September , and was boasting a growth of about 30 percent per year since Family Dollar stores generally operated in leased buildings, which saved the company on capital investment.
In March , the company's th store opened, in Brunswick, Georgia. Family Dollar continued to thrive through the early s, ringing up more record profits--in fact, it had a nine-year streak of them--and opening more than new stores a year between and But while the company was becoming a more national presence, it failed to keep a close eye on increasing competition from Wal-Mart Stores.
Suddenly, sales growth in recently opened stores tripped from nine percent in , to a dull two percent in , then came to a dead halt the following year, and dropped ten percent in Most stores were rooted in rural areas, usually in towns of less than 15,, often within walking distance or a very short drive from home.
The stores were about one-tenth the size of a Wal-Mart or Kmart, so product lines had to be meticulously selected and limited. Even though the bigger stores could offer more merchandise, the draw of Family Dollar stores was often location. Wal-Marts were typically planted outside or on the edge of town, while Family Dollars were downtown. The real problem arose when Family Dollar management, preoccupied with expansion, stopped checking on the competition's pricings. When it did check, only after sales slipped enough to cause alarm, it found that Wal-Mart was pricing sometimes as much as ten percent below Family Dollar--often on such things as health and beauty products that Family Dollar was advertising heavily as on sale.
Thus, in , Family Dollar instituted a new pricing policy: they would not be undersold. Within two months, same-store sales were up ten percent. Clearly, the lower prices wounded margins somewhat, but the company compensated by scaling back its expansion.
It had been expanding as far north as Michigan, and as far west as Texas, and right into Sam Walton's Wal-Mart territory. In , there were 1, Family Dollar stores in 23 states. At the same time, Wal-Marts were infiltrating Family Dollar's stronghold, the rural southeast. Wal-Mart was using its buying power to plunge prices while Family Dollar was using its profits to open more stores. After catching itself and lowering prices to boost sales, the company faced another challenge in the form of a management shake up.
In the mids, Leon Levine was the company's chairman and chief executive; Leon's first cousin, Lewis E. Levine, served as president and chief operating officer; and Leon's son Howard Levine was senior vice-president of merchandising. In September of , just as Family Dollar reported its fourth consecutive quarter of lower earnings, Lewis Levine abruptly resigned, and Howard Levine left as well.
Moreover, the cousins had disagreed over strategy; Lewis felt that Leon wasn't responding quickly enough to changes necessary to defend against the encroaching Wal-Mart. Essentially, it come down to stand-off, in which Lewis asked for more control and the board asked for Lewis's resignation.
Leon's son, Howard Levine, the heir-apparent, seemed to have left the company for more personal reasons. Meanwhile, the battle with Wal-Mart grew heated. Family Dollar's new "everyday-low-price" strategy was still hard on the margins. When Family Dollar first began matching or beating Wal-Mart on prices for items like health and beauty aids and automotive supplies, same-store sales rose nine percent for a few months, but then fell back to the levels of the year prior.
But Leon Levine, the Family Dollar founder, was not without experience in the discount shop game. As a kid, Levine and his brothers worked in their father's department store called The Hub. Then, a series of events threw Levine into a more demanding role.
His father died in , and his brother was drafted into the Korean War. A teenage Leon was soon running The Hub and was even vice president of the store from to During his vice presidency, Levine and his brother, back from the Korean conflict, bought a chenille bedspread factory called Union Craft Company.
This was near Wingate College, where Leon attended business classes in the morning before running the factory in the afternoon.
By , Levine had sold the bedspread factory and made one important trip — he visited a dollar store in Kentucky. Inspired, Levine, now married and a father, opened the first Family Dollar later that year. He was 22 years old. Soon, Levine had four stores in the Charlotte area. Then, Family Dollar had expanded into South Carolina by , underselling the shore stores at Myrtle Beach in swimwear and towels. The s was a time of major growth for Family Dollar and its founder.
And even though the young chain had opened its th store in , its first distribution center in Matthews, North Carolina, in , followed by its th store, the decade would prove to be a challenge. But by the mids, major shifts in the American textile industry had major effects on Family Dollar's southeastern-based consumers.
As workers in the furniture, textile, and tobacco industries were laid off, the discount store began to first see declining sales — dropping as much as 50 percent in and Things soon stabilized. In the end, Family Dollar was fine. More than fine. It'd be hard to argue that Family Dollar founder Leon Levine wasn't a rich man. But our humble founder took his success in a distinct direction.
In , Levine and his second wife, Sandra Poliakoff his first wife Barbara Leven died of breast cancer in , established The Leon Levine Foundation with the mission "to improve the human condition by creating permanent, measurable, and life-changing impact throughout the Carolinas. Operating out of where else but Charlotte, North Carolina, the foundation invests in nonprofits and projects with "a focus on sustainability in the areas of healthcare, education, Jewish values, and human services. To date, TLLF has made countless donations.
And it's still going. As anyone could guess, the s spelled success for the business. Therefore, it's no surprise that by , Family Dollar became a member of the Fortune list — the annual rundown of the largest corporations in the United States as published by Fortune magazine.
This would also be one of the last milestones founder Leon Levine would see as the head honcho. He would retire the following year, carrying with him the title of Chairman Emeritus, and his son Howard R. Levine would take over as CEO. Macy's unveils holiday window display with gratitude theme. It's official: Black Friday is irrelevant.
See what's new inside Walmart stores. Dollar General's business is booming. It's also vulnerable to crime, police say. It is owned by the Dollar Tree, which operates an eponymous chain of 7, other stores in suburban areas. The combined company hoped that by joining forces, it could grow its customer base, reduce costs and fend off bigger retailers like Dollar General DG and Walmart WMT. An activist investor heavily pressured the company earlier this year to dump the ailing Family Dollar line and start selling Dollar Tree merchandise for higher prices.
Dollar General tries to make healthy food more accessible. Read More. Dollar Tree outlined an aggressive plan for Family Dollar on Wednesday after Family Dollar posted another quarter of sluggish growth during the holidays. Sales at Family Dollar stores open at least a year grew 1.
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