Sunday, April 13, 2014

When opening a new business, particularly a brick-and-mortar store, one of the most important factors that goes (or should go) into the decision-making of the entrepreneur or corporation is the location (location, location, location, as developers say). A lot of market research and data are analyzed when new locations of franchises are being considered. So it's strategic when a franchise or chain like H&M, Chuy's, Taco Mac, or Chick-fil-A, for example, is deciding when and where it is opening in Charlotte. Among other things, it usually represents an area's population growth, and depending on the business, it might represent the affluency of that population.

But what does it mean when a new Family Dollar store opens in an area? Back in December, I was making a quick drive to the bank down the street from my house when I realized that a Family Dollar was being built. I commented on Twitter:
Over the last couple of weeks, I've had conversations with various people on topics involving socioeconomics. In a few of those conversations, we began talking about companies/stores like Walmart and Family Dollar, and in the case of Family Dollar, some interesting perspectives emerge as to the type of areas and neighborhoods the company opens stores in.

This Family Dollar is opening soon on Mt. Holly-Huntersville Road in my neighborhood.

Leon Levine opened the first Family Dollar store in Charlotte in 1959. Today, it's a publicly held, Fortune 300 company, headquartered in Matthews, with more than 8,100 stores in 46 states. It's largely viewed as a fast-growing chain, so it came as a bit of a surprise when Family Dollar announced on Thursday that it would be closing 370 stores and slowing new-store growth. This is a result of sales from the most recent quarter being down 3.8 percent. Also as part of their "immediate, strategic actions," the CEO says the company has "made a significant investment to lower prices on about 1,000 basic items." So apparently, you'll be able to buy many items at the store for even cheaper; I guess as a way to drive more customers to the stores.

Furthermore, this is how Family Dollar is described in its corporate bio:
For more than 54 years, Family Dollar has been providing value and convenience to customers in easy-to-shop neighborhood locations. Family Dollar’s mix of name brands and quality, private brand merchandise appeals to shoppers in more than 8,100 stores in rural and urban settings across 46 states. Helping families save on the items they need with everyday low prices creates a strong bond with customers, who often refer to their neighborhood store as “my Family Dollar.”

Recently, a friend told me that "You won't find a Family Dollar in Ballantyne." This goes back to the perception of the type of neighborhoods in which Family Dollar opens stores. And my friend is right; I searched the store locator on Family Dollar's website and there isn't one in Ballantyne. But according to the company's history section, where it describes how and why a young Leon Levine started Family Dollar, it says he found success opening discount stores in low to middle income neighborhoods.

If that trend continues, then does it mean that if there's a new Family Dollar store opening where you live, that your neighborhood is considered low to middle income?

This isn't at all intended to be a knock on Family Dollar as a company. I've never heard anything bad about what it's like to work for them, the way, say, we often hear complaints about Walmart. And it should be noted that the company's founder and his wife do some incredible charitable giving through the Leon Levine Foundation--their impact can be seen throughout Charlotte especially, with the tens of millions of dollars they've donated.

The reality is that a business is a brand, and brands represent things. What do you think it represents if a Family Dollar store opens in your neighborhood?


  1. It has been said the when Leon Levine was sizing up shopping centers for the potential of opening a new store, he would look for dark stains in the parking lot. Dark stains means cars with oil leaks, which translates to the kind of customer who would be interested in a discount store. A store that sells many household staples, including oil for their leaky cars.

    Sure the methodology has changed, but the goal is the same: Find areas with the kind of consumers who shop at other Family Dollar stores. Single mothers, public transit riders, people on public assistance, etc. You don't find many of those in Ballantyne, and until that changes, you won't find a Family Dollar there.

  2. Anonymous is right. As much as I hate to tell you, a Family Dollar moving in isn't a good sign for where your neighborhood is headed, just like any other dollar store, Aldi, etc. moving in isn't a good sign. They all market to low-income consumers.

  3. I don't think this means your neighborhood is automatically on the downslope; any new business is good business. In fact, this area is probably still experiencing growth extending down from the Northlake area. I'd think having Family Dollar, or any other store for that matter, close or go out of business in your neighborhood would be a much bigger problem. Look for failed businesses as a better indicator.

  4. None in Ballantyne. None in Buckhead (ATL). @Christine: Your statement "any new business is good business" is tenuous at best. Imagine if that "good business" was a night club or Gentleman's club moving into your neighborhood. Would you feel the same?


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