Week of October 11, 1999
  Blockbuster Deal of the Week
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Old-Fashioned Family Dollar Keeps
Growth Surge Going with 500-Employee Kentucky Facility

Flexing unexpectedly strong staying power within the Information Age economy, old-line discounter Family Dollar Stores (www.familydollar.com) has announced that it's building a new 907,000-sq.-ft. (81,630-sq.-m.) distribution center on a 93.5-acre (37.4-ha.) site in the MMRC Regional Industrial Park in Rowan County, Ky. Construction of the 500-employee facility will begin almost immediately, Family Dollar officials said, with the operation going online in the summer of 2000.

Logistical advantages and customer proximity were two of the major deal-makers in siting the new center, according to R. David Alexander, Family Dollar senior vice president of distribution and logistics.

"The MMRC Regional Industrial Park is an ideal location for our distribution facility," Alexander explained. "Rowan County has outstanding access to major interstate highways, which will be utilized to speed deliveries of merchandise to our stores," Alexander continued. "This is the center of a region where Family Dollar has a heavy concentration of stores, and the company continues to add new stores at a rapid pace as part of an aggressive store expansion program."

The Family Dollar Niche

Rapid, ongoing expansion wasn't how some business prognosticators saw Family Dollar's future unfolding in an economy that's increasingly driven by high-end products and slick, brand-name-championing marketing strategies.

Nonetheless, the Matthews, N.C-headquartered Family Dollar chain has continued to flourish. For example, during the fiscal year that ended Aug. 28, 1999, the company opened 366 new stores while increasing its annual revenues by 16.3 percent. During fiscal year 1999-2000, Family Dollar plans to open 400 to 425 more new stores. All told, the company now operates more than 3,300 stores in 39 states, stretching from Maine to Florida and as far west as New Mexico. Half of Family Dollar 3,300 stores have opened in the last 10 years - smack dab in the middle of Info Age prime time.

What Family Dollar has been able to carve out is a lower-end market niche. As the company's Web site puts it, "The merchandising concept responsible for this growth provides consumers with good values in low-cost, basic merchandise for family and home needs." Hoover's Online (www.hoovers.com) puts it another way: "The discount chain's target customer is a woman shopping for a family that makes less than US$25,000 a year."

Family Dollar has nurtured that niche with its location strategy, siting small neighborhood stores near low- and middle-income customers in rural and urban areas. From those strategic locations, the company offers discounted prices for everyday items like clothing, shoes, health and beauty supplies, automotive supplies, house wares, and school supplies. Almost all items are priced below $18.

The new Kentucky center will join Family Dollar's other major distribution operations in Matthews, N.C.; West Memphis, Ark.; Warren County, Va.; and Duncan, Okla. The new Kentucky center's location positions it to serve some of the states in which Family Dollar is most heavily represented, including Indiana (which has 96 stores), Kentucky (115 stores), Ohio (191 stores) and West Virginia (86 stores).

Regional Park Strategy Gets a Boost

Landing the 500-employee Family Dollar operation in Eastern Kentucky buttresses the wisdom of the decision by the Kentucky Cabinet for Economic Development to create the regional industrial park in Rowan County. Located 1.1 miles (1.8 km.) from I-64, the park offers land priced at $12,500 an acre, say state officials. In addition to state government, the Kentucky counties of Carter, Menifee, Morgan and Rowan are partners in the park, which is marketed by The Morehead-Rowan County Economic Development Council (www.edc-eky.org/index.htm).

In its new Kentucky distribution center location, Family Dollar is certain to exhibit the trademark community involvement that's underscored the company's presence at its other major locations. Alexander alluded to Family Dollar's neighborliness at the announcement of the company's new Kentucky facility.

"All of us who have had the opportunity to work with Gov. [Paul] Patton and other officials and representatives of the state of Kentucky, Rowan and other counties, the city of Morehead and MMRC Regional Industrial Development Authority have been impressed with their commitment to economic development and growth," Alexander said. "There has been a real spirit of cooperation, and we have been made to feel welcome.

"All of us at Family Dollar look forward to becoming an active member of the local communities."

Area bankers around Family Dollar's new Kentucky center, however, shouldn't get terribly excited, for the company has another distinguishing characteristic that makes it something of a horse-and-buggy on the Information Superhighway.

Remarkably, Family Dollar's ongoing store expansion program has been financed entirely with internally generated funds. "The company has no long-term indebtedness," says a Family Dollar spokesman.


©1999 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.