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Howard Levine was almost 1 year old when his father, Leon, opened the first Family Dollar store on Central Avenue in Charlotte's Plaza Midwood neighborhood.
That was in November 1959. Now, the Matthews-based discount retailer is celebrating its 50th anniversary, and Howard Levine - also age 50 - is CEO.
The company has grown to 6,700 stores in 44 states, selling low-priced food, household goods and clothing in neighborhood locations. That's helped it flourish in a value-conscious economy that has socked a range of other retailers and left Family Dollar's core low- and middle-income customers struggling.
Levine, whose early duties at Family Dollar included serving as an unpaid toy tester in the aisles of a South Boulevard store after closing time, joined the company in a more adult role in the early 1980s and became CEO upon his father's retirement in 1998.
He spoke with the Observer last week at company headquarters on Monroe Road, as the chain prepared to open a 50th anniversary location near uptown and was gearing for the crucial holiday shopping season. The conversation has been edited for brevity and clarity:
Q: Many family businesses don't last 50 years. Why has yours?
I don't think we're viewed as a family business anymore, but continuing with the legacy is a big motivating factor for me. A lot of the fundamentals that are so important, the same things that worked (in 1959), are the same things that work now. They're being executed differently as we've reinvented ourselves over the years.
Q: What are your earliest memories of the stores?
I do have memories of traveling stores at 6, 7 years old, and it was exciting and fun. It wasn't something I had a hard time gravitating to.
Q: Your newest store seems to have a lot of features that were molded by the current economic environment.
No question about it. When our first store opened, it was all apparel. Nothing was over $2, and it quickly went to nothing over $3. But now, apparel is a much smaller part of our business, as customers have told us, particularly in this economic environment, they're focused on basic needs. If they're focused on basic needs, we're not going to be relevant if they want paper products and food and we've got apparel.
Q: What do you foresee for the holiday season this year?
We think it's going to be tough. Customers are going to be very focused on value and getting deals.
Q: So you don't have a sense that the economy is turning in any substantive way?
No, I don't think so. We did not incorporate any uptick in the economy in our plans for the current fiscal year.
Q: What would be your sign that a change is taking place?
One of the things you'll see is just the obvious, a lift in the (sales at stores open a year or more). But the mix of sales will probably gravitate more to the discretionary purchases, some of the things that they may have been curtailing.
Q: It seems people are trying to figure out if a 'new normal' has emerged. What do you think?
There was a lot of people living beyond their means. I think that's changed. People are going to be more thoughtful and conservative about the way they spend their money every day. How or when it stops, and how long it goes, I don't know, but ... until that equilibrium gets back to where people are comfortable, I don't think you start seeing a lot of real ramp-up in the economy. My view is, we're still bouncing on the bottom.
Q: Some of your competitors, Wal-Mart among them, are trying to launch big price-war initiatives. How are you able to maintain your profit margins amid that?
We obviously wouldn't entertain getting in a pricing war with Wal-Mart. I'm pretty sure we would lose. All of our customers shop Wal-Mart, so we've had to compete with price, but more than just price. We have smaller stores located in the neighborhoods where our customers live and don't charge a pricing premium for that. We've had to have a way of managing our business so we don't get caught up in everything they're doing.
Fortunately...(dollar stores) have carved out this niche of value and convenience, and it hasn't impacted Wal-Mart in a negative way. Everybody who picks a fight with Wal-Mart loses. Just tick down the list - most recently Circuit City, to all the regional discounters, to Sears and Kmart, probably, in the near future.
Q: The Supreme Court recently declined to review a class-action case in which store managers won a more than $33 million judgment against Family Dollar in an Alabama federal court, saying they were improperly denied overtime pay because they were classified as salaried, not hourly, employees. Where does that leave it, and what are you going to do now?
It's over. We pay the money. We've already financially booked it, but we actually had to write a check - which we did - and we're just reviewing to make sure we're in compliance with the law, which I think we are. I don't think there's any material shifts we'll have to make in the way we run our business. It's still mind-boggling to me. We've had cases in Charlotte that we've won, on the exact same issue. I think we got a raw deal (in Alabama)...so I still think the Supreme Court should have heard it. I think there will be more disputes about this issue, and at some point they may consider it. Unfortunately for us, that money's gone and we've got to move on to the next thing.
Q: What about Family Dollar might folks in Charlotte not know?
It seems to me everybody knows Family Dollar when I get around town here (laughs). Our year that just ended was a big year. It wasn't our biggest year ever, but it was so much better than what everybody else was doing, and that gave us a lot of visibility. We have grown in terms of the management talent and technology we've brought in. We're not the most sophisticated company out there, but we're still growing, and I think people appreciate that more than ever.
We still have the same basic principles. We want to treat people fairly; we want to give people a career; we want to give people the opportunity to make money. So, I think people have always recognized us (locally)....But we'd like to get more people not only knowing us, but shopping with us. We're working hard on continuing to build upon that.
