In 1959, Family Dollar Stores was founded in Charlotte by a 21-year-old Leon Levine and by Bernie Levine. The Levine family had a long history of entrepreneurs. Leon’s father founded the Hub store in 1908, and his brother Al founded Pic-n-Pay in 1957. Leon envisioned Family Dollar as a self-service retail store marketed towards middle and lower class families with all merchandise sold for one dollar. Levine’s model was that “the customers are the boss, and you need to keep them happy.” The company expanded quickly and opened stores across North Carolina and neighboring states. By the 1970s the company had opened its 100th store in Brevard, North Carolina.
In the 1970s, Family Dollar’s sales declined as workers in the furniture, textile, and tobacco industries were laid off. Family Dollar’s profits plummeted by fifty percent by 1975. Recovery started with a new marketing strategy: eliminate the policy that all products be sold for three dollars or less, restructure inventory controls, and acquire an electronic, data price system. Family Dollar was able to garner $151 million in sales by 1979.
Starting in the early-1980s, Family Dollar earned record profits and opened one hundred new stores from 1982 to 1987. However, with competition from rival Wal-Mart slashing prices, sales dropped ten percent in 1987. As a result, Family Dollar executives responded by slashing prices in its stores and slowed down expansion. Meanwhile, Family Dollar had an advantage: unlike some of its competitors, the debt-free chain could open stores small urban areas. In the summer of 1987, Ralph Dillon became the new CEO and went back to the foundations of the company by slashing prices even further and began supplying more upscale merchandise such as candles and costume jewelry.
By 1994 Family Dollar shifted to a neighborhood convenience store model and tools, toys, and portable stereos, for example, were stocked on the shelves. The store also shifted its pricing policy and allowed items up to $25 to be sold. By the late-1990s Family Dollar sold more name brand items, and by 2000, sales exceeded $3 billion. By 2002, the company made the Fortune 500 list.
Family Dollar stores are primarily located in small towns with products sold for less than larger department and retail stores such as Wal-Mart and Target. Although the vast majority of items are priced above one dollar, approximately ninety-percent are less than ten dollars.
William S. Powell, ed., Encyclopedia of North Carolina (Chapel Hill, NC 2006); "Introduction." FamilyDollar.com. N.p., n.d. Web. 15 May 2012. http://corporate.familydollar.com/pages/history.asp&xgt; "Family Dollar Stores, Inc. ." fundinguniverse.com. N.p., n.d. Web. 15 May 2012. http://www.fundinguniverse.com/company-histories/Family-Dollar-Stores-Inc-company-History.html.