FDO Overview

Founded in 1959, Family Dollar Stores Inc. (FDO) is a variety store located throughout the continental U.S., with the parent store located in Charlotte, North Carolina. Although the business is not a true “dollar store,” Family Dollar does contain many items within that price point. However, nearly 90% of the store’s inventory is priced below $10.

Targeting the low to lower-middle income consumers, Family Dollar offers consumables that include household paper products, chemicals, candy, snacks and other food items. The company also offers health and beauty aids, hardware and automotive supplies, and pet food, as well as home products, which consist of domestics, housewares, giftware, and home decor.

In addition, Family Dollar provides apparel and accessories, including men’s and women’s clothing, boy’s and girl’s clothing, infant’s clothing, shoes, and fashion accessories. Another portion of the company’s inventory includes seasonal goods and electronic items, as well as toys, pre-paid cellular phones and services, stationery and school supplies.

The concept of the business was the brainchild of Leon Levine, a then 21-year-old entrepreneur and recent graduate of Duke University. As mentioned above, Levine opened the first store in 1959, and shortly thereafter, opened their first store outside of the state, in South Carolina in 1961.

Over the next several years, Family Dollar began to branch out further into the southern states, opening stores in Virginia and Georgia. By the end of the 1960s, Family Dollar was primarily a southern company with more than fifty stores in the Charlotte area alone.

The following decade was one of expansion for the company and by 1971, Family Dollar had opened their 100th store. Just three years later, the company opened their 200th store and four years after that, Family Dollar had their 300th store opening. Also in the 1970s, the company’s stock first went public, and in 1971 debuted at $14.50 per share. Later, in 1979, FDO began trading on the New York Stock Exchange (NYSE).

The 1980s were fruitful for the company as well, as Family Dollar opened their 400th store in 1981, followed by their 500th in 1982 and their 700th in 1983. By the end of the decade, FDO was operating more than 1,500 stores throughout the southeast.

Nearing the end of the 1990s and into the new millennium, Family Dollar’s expansion slowed a bit as 2000 saw the company operating just over 2,400 stores. The company turned their attention during this time to increasing productivity, hence the opening of several distribution centers located in Arkansas, Virginia and Oklahoma.

Since 2000, FDO saw massive expansion once again, opening a total of 3,500 stores, along with additional distribution centers in Kentucky, Iowa, Texas, Florida and New York. By 2001, Family Dollar joined the S&P 500 index and in 2002, the company was added to the Fortune 500 list of largest publicly held companies.

By the end of 2008, Family Dollar operated 6,617 stores in 44 states and the District of Columbia providing consumers with a selection of merchandise in neighborhood stores. During that year, brand name merchandise accounted for roughly 44% of sales, while merchandise sold under Family Dollar’s private label program and merchandise sold under other labels accounted for the balance of sales.

At the conclusion of the company’s fiscal 2008, ending in August 2008, approximately 20% of Family Dollar’s stores were located in large urban markets, those markets with populations above 200,000. Furthermore, approximately 26% of the company’s stores were located in small urban markets, wherein the markets had a population greater than 75,000 but less than 200,000, and 29% of new locations opened were in small urban or suburban markets.

Within the Service sector, Family Dollar currently competes with other well-known publicly traded companies such as Wal-Mart Stores Inc. (WMT), Dollar Tree Inc. (DLTR), along with privately held Dollar General Corporation.

By Better Trades