Worth a look: A Fortune magazine profile of N.C.-based Family Dollar, which is thriving in the recession along with several "dollar" stores.
Family Dollar, founded by Leon Levine in 1959, reported a 6.4% jump in second-quarter sales at stores open more than a year. It's one of the top performers among Fortune 500 companies, with shares are up 28% so far this year after rising 36% in 2008.
The philosophy behind the success? Says Fortune:
While other retailers have courted a more upscale clientele by adding fine jewelry and designer clothes, Family Dollar has stayed true to its roots. A typical shopper earns just $35,000 a year. Says (CEO Howard) Levine: "We want our customers to know they can afford anything in our stores."
How does Family Dollar do it? By selling a greater amount of second- and third-tier
brands, which cost less and possess greater margins than do first-tier brands - more Gain laundry detergent than Tide, for instance - and by cherry-picking inexpensive real estate in unglamorous locations. At $2 a square foot, Family Dollar's occupancy costs are a tenth of what a typical supermarket or drugstore pays, and 1/50th the cost of a mainline department store, estimates Burt Flickinger III, managing director of the Strategic Resource Group.
The story doesn't mention, but you might remember, that Leon Levine and his wife, Sandra, donated $1 million in December for the Critical Need Response Fund, an emergency fund based in Mecklenburg County to help thousands of the homeless, hungry and jobless here through the cold months.