The Untold Truth Of Family Dollar

To many, the Family Dollar chain of discount stores seems like another faceless corporation. But it has a face, and quite a young one in the early days. The first store was opened by a young man who already had a lifetime of retail experience in his family's retail store.

During the remainder of the 20th century, Family Dollar expanded rapidly throughout the south, then the country. It went public, offering common stock, in the early 1970s, struggled that same decade thanks to historic shifts in the textile industry, and continued to see major growth in the 1980s and '90s. By 2002, Family Dollar made the Fortune 500 list, and all this success led to the founder donating millions of dollars to charities, colleges, and social projects.

In recent years, Family Dollar has made some commotion in the business news world, including hostile bids, mergers, and a backslide in growth. Not to mention the chain's magnetism for crime in working-class neighborhoods. Oh, and you probably shouldn't eat the food, either. But even more recent news shows how what started as one little bargain shop has been able to thrive during a pandemic as an essential business. This is the story of Family Dollar.

The first Family Dollar was opened by a 22-year-old

Many people in their early 20s are most likely in school or working entry-level jobs, not opening what would be the first of thousands of stores across the country with one simple concept: Nothing is more than $2.

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 1949, 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 1954 to 1957.

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. (It should also be noted that Levine's other brother, Al Levine, founded Pic-n-Pay in 1957.) By 1959, 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.

Family Dollar started as one store in Charlotte, North Carolina

Founder Leon Levine started the Family Dollar chain in November 1959 with its first location on Central Avenue — between Pecan and Thomas avenues in the Plaza-Midwood — in Charlotte, North Carolina. Levine opened the store with about $6,000.

According to the Family Dollar website, the only other concept Levine was shooting for, aside from all the products being $2 or less, was the idea that "the customers are the boss, and you need to keep them happy." Those customers Levine aimed to please were of members of middle- to low-income communities. Although, according to Our State, the average customer is "a woman in her mid-40s who makes less than $40,000 a year and is the head of household."

Soon, Levine had four stores in the Charlotte area. Then, Family Dollar had expanded into South Carolina by 1961, underselling the shore stores at Myrtle Beach in swimwear and towels. By 1967, Family Dollar had 27 stores operating in four states in the southeast, with annual sales reaching more than $5 million.

The 1970s were apparently a tough time for Family Dollar

The 1960s was a time of major growth for Family Dollar and its founder. In fact, Our State mentions that, "It took 10 years to open 100 Family Dollars in the Southeast."

The 1970s started with another milestone — Family Dollar went public as a company, offering common stock at $14.50 a share. And even though the young chain had opened its 100th store in 1971, its first distribution center in Matthews, North Carolina, in 1974, followed by its 200th store, the decade would prove to be a challenge.

But by the mid-70s, 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 1974 and 1975. But the scrappy chain put together new marketing, began to relax its reputation for selling items for less than $3 (by that point), and added an electronic data processing system. Things soon stabilized.

In the end, Family Dollar was fine. More than fine. Annual sales flew past $100 million by 1977, and the aforementioned common stock began trading on the New York Stock Exchange to polish off the decade in 1979.

The founder of Family Dollar is a major philanthropist

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 1980, Levine and his second wife, Sandra Poliakoff (his first wife Barbara Leven died of breast cancer in 1966), 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." The couple was soon making big moves with the foundation, donating $1 million to the creation of Shalom Park in 1980, and The Sandra and Leon Levine Jewish Community Center was soon named after them.

Large donations continued, including $10 million for construction of The Levine Science Research Center at Duke University in 1991, $1 million to name the Levine Museum of the New South, $2 million for the Levine Ramah Center at Camp Ramah Darom in 2000, and so on.

To date, TLLF has made countless donations. By 2013, Levine had given away more than $75 million through the foundation. And it's still going. In 2019, TLLF granted $5 million to an affordable housing campaign in Charlotte, and the Levine Children's Hospital is doing some cool stuff for patients who need stem cell transplants.

After four decades, Family Dollar made the Fortune 500 list

As anyone could guess, the 1990s spelled success for the business. Family Dollar's yearly sales exceeded $1 billion by 1992, a second distribution center was opened in 1994, and the chain circled back to its hometown of Charlotte to open store number 2,500. By the new century, annual sales had surpassed $3 billion, and in 2001, the business was added to the S&P 500 Index.

Therefore, it's no surprise that by 2002, Family Dollar became a member of the Fortune 500 list — the annual rundown of the largest 500 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.

Sure, Family Dollar has food, but you probably shouldn't buy it

Breakfast cereal, baking supplies, canned food, and all manner of snacks. These are all available at Family Dollar, and that's not news. Thought the chain started selling mostly clothes and motor oil, there's been a discount grocery component for decades. But some of the food options here, you may or may not be surprised to know, are not great, and they should never be hitting the bottom of your cart.

Chips are often cheap but frequently sold at a much lower weight. Same goes for name-brand cereal and packs of gum. Milk, soda, spices, condiments, and canned goods are not actually sold at discount prices. And if you're the type who puts open boxes of baking soda throughout the muskier areas of your home and think dollar stores are a great way to bankroll a fresh-smelling house, wrong. Baking soda is often less expensive at the grocery store. As for cheese and steak, if you care to call it that, you may be taking home some of the lowest-grade products your local dollar store could possibly shelve.

But hey, quick and convenient is quick, convenient, and mostly inexpensive, so if you've got friends on the way or the grocery store happens to be closed, there's no shame in visiting the closest Family Dollar. A can of Campbell's Condensed Chicken Noodle Soup sold by any other store would taste just as salty.

Each Family Dollar store has roughly the same layout ... or did

Founder Leon Levine started with a simple floorplan right from the beginning. But according to the website, there was a method to this nearly identical madness: "With the stores uniformly laid out and stocked, store managers were able to focus on providing good customer service."

To take it back to the 1990s, Family Dollar somewhat graduated from the neighborhood general stop and became more of a mini department store. Locations started selling more electronics, toys, and tools.

Over time, most were designed with women's wear in the front, on the right, to better appeal to Family Dollar's average shopper. A journalist in North Carolina even tested it out in at some locations in Charlotte and Ohio. Sometimes food was in the front, sometimes in back. Stores even started selling cigarettes in 2012. But each store was more or less the same: neat, simple, bright, with whole-dollar items on the shelves, and that now-classic red, orange, and white motif.

That is, until Dollar Tree took over.

Family Dollar was acquired by Dollar Tree in 2015

In 2014, Family Dollar announced its agreement to merge with Dollar Tree and became a wholly-owned subsidiary of the discount store giant by July 6, 2015. But the merger was not without drama.

According to The Charlotte Observer, there was a hostile bid to take over Family Dollar from another discount retailer, Dollar General. In the end, which is to say early 2015, Dollar Tree won out after Dollar General "couldn't prove to shareholders that antitrust regulators would approve its Family Dollar purchase."

At the time, the Dollar Tree and Family Dollar merger meant the combined company would pull in annual sales of more than $19 billion, all while overseeing more than 13,000 stores, according to The Charlotte Observer. Because of the number of locations, the joint company is the United States' largest dollar-store chain. Dollar Tree CEO Bob Sasser had big plans for the Leon Levine-founded chain. Sasser said he planned to lower prices at Family Dollar, since items there had reached up to $10, and improve the appearance of many neglected locations.

Family Dollar closed about 400 stores in 2019

"I think Family Dollar has a little bit more of a real estate problem than people realize," Edward Jones analyst Brian Yarbrough told The Charlotte Observer once Dollar Tree completed purchase of Family Dollar. "It's going to take several years of remodeling stores, fixing them up and probably moving some locations or shutting some locations down."

That promise was kept. In 2019, it was announced that 390 Family Dollar stores were closing. This was new for the discount chain considering that, since its founding in 1959, the company had done nothing but grow. After the merger with Dollar Tree, however, Family Dollar sales were sluggish, which meaning Dollar Tree was getting taken down with it. By January 2019, according to MarketWatch, "activist investor Starboard Value LP revealed a stake in Dollar Tree and asked management to consider selling Family Dollar, even at a loss."

Therefore, Dollar Tree decided to hemorrhage nearly 400 Family Dollar stores. As a result, Dollar Tree stock jumped up, especially considering that in addition to the closing, another 200 Family Dollar locations would be re-branded as Dollar Trees, and another 1,000 stores would be renovated.

Discount stores like Family Dollar can be crime magnets because of retail void

On a recent news search of Family Dollar, headlines tell of attacked employees, shootings, car accidents, and ever warnings from the mayor of a town one location happens to be sitting in. According to a recent article, a collaboration between The New Yorker and ProPublica, discount chains like Family Dollar have become magnets for crime and killing is some areas.

The high frequency of these crimes may also be attributed to the sheer number of stores. Family Dollar now has more than 8,000 locations. However, there is often a retail void in poor and working-class communities. In 2019, discount chains accounted for more than half of all retail stores opening. Therefore, in these lower socio-economic, often high-crime neighborhoods, there just aren't other businesses for criminals to target.

"In a lot of these areas, they're the only stores around," says reporter B. J. Bethel with WDTN (via ProPublica), "It's the only place to get cash." In addition to robberies, carjackings, drug transactions, and altercations can occur.

Family Dollar is an essential business, and business has been booming

In 2020, the COVID-19 pandemic devastated certain industries, including the service industry, but discount chains in the U.S. have fared relatively well. As coronavirus-related quarantines and business shutdowns began in March, both Dollar Tree and Family Dollar stores were considered essential businesses and were permitted to remain open. According to BusinessWire, "both Dollar Tree and Family Dollar stores began to experience a material pick-up in store traffic and sales related to essential products ..." Those products included cleaning supplies, sanitizer, household products, paper goods, food, and medicine.

As a result, the many store renovations were temporarily suspended, and Family Dollar had to reassess its full-year fiscal 2020 plans. However, sales continued to see a steady incline, even as all 15,000-plus stores began closing at 8 p.m. in order to limit exposure to associates, start on new cleaning protocols, and restock shelves with essential products.

By the end of March, sales were reported to be up 7.1 percent at Dollar Tree and up by 14.4 percent at Family Dollar. By the end of the first quarter on May 28, Family Dollar had opened 99 new stores, renovated or relocated 21 stores, and closed 14. As a result, "same-store sales for Family Dollar increased 15.5 percent."