VOL. 118 | NO. 22 | Friday, February 6, 2004
Family Dollar Expands in Memphis
Low-cost retailer to open three new stores by summer
The Daily News
With 30 stores in the Memphis area, Charlotte, N.C.-based
Family Dollar Stores Inc. already has a commanding presence in Memphis. But the
companys aggressive expansion plans mean its foothold in the city continues to
According to The Daily News Public Records Database,
building permits were filed last week for two new Family Dollar locations. One
permit totaled $525,000 for a store at 2980 Summer Ave., and the second,
$535,810 for a store at 2743 N. Watkins St.
Family Dollar representatives confirmed plans for the two
new stores, adding that a third store also will open in Memphis this summer.
That stores location is undisclosed at this time.
Weve got a number of stores in the Memphis area planned,
but until we finalize all the arrangements, we dont like to give out the
details, said George Mahoney, executive vice president of the company.
New stores. Frank Watson, who represents the seller
of the land at 2980 Summer Ave., said Family Dollar has a contract on the
They have asked the city for a permit to put a Family
Dollar there, he said of the tract that formerly housed Eubanks Lumber Co.
Were just waiting on the city.
Watson said the land still contains structures used by the
lumber company that would be demolished to make way for the new store.
Mahoney said all three planned stores could be open by
National growth. The companys expansion in Memphis
goes along with Family Dollars growth plans nationwide.
In the four-week period ended Jan. 31, the chain opened 44
stores, including two in Tennessee. That brings the total number of stores
operated by the company to 5,139 in 43 states.
Aggressive expansion. Family
Dollar hasnt tread lightly when it comes to expansion, adding nearly 2,000
stores in the last five years. During the fiscal year ended Aug. 30, 2003,
Family Dollar opened 475 new stores and closed 64 stores, bringing its total
number to 5,027. The company plans to add 565 stores and close 60 stores this
fiscal year, which ends Aug. 28.
Weve been expanding for quite a few years very
aggressively from our base here in North Carolina, Mahoney said. What is
driving that growth is consumer acceptance, I think, of what we offer, which is
a combination of convenience we call ourselves a neighborhood convenience
discount store and the fact that our stores are relatively small.
We can locate them in the neighborhoods of our customers.
Staying close to the customer. Its
that neighborhood-store feel that has led Family Dollar to cluster its stores,
sometimes in close proximity to one another. While the proposed store at 2980
Summer Ave. is the first in the 38112 ZIP code, its just a mile from the
companys store at 3522 Summer near Highland Avenue. Four other stores are
located within about 3 miles of the site.
new store at 2743 N. Watkins will be the fifth in the 38127 ZIP.
Targeted clientele. Although
Mahoney declined to say whether any stores would be demolished in Memphis to
make way for the new stores, he did say clustering stores is part of the
companys marketing aim.
Our stores are relatively small stores, he said of the
typical 6,500 square feet to 8,000 square feet of selling space in each
structure. We dont need a large trade area to draw from. We like to locate
them in the neighborhoods of our customers, so if theres another neighborhood
just down the street 2 or 3 miles its an efficient way to operate.
Dollar, which caters to low- and lower middle-income families, records an
average transaction of just over $8, Mahoney said. The average store has annual
sales of $1 million.
People are going to recognize the Family Dollar name, so
we dont have to advertise when we cluster stores, Mahoney said. Most of our
trade comes from within just a few miles of the store, so advertising is not as
important when people are going to be driving by or walking by the store every
day in their neighborhoods or on a regular basis.