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Dollar stores have become a major part

of American retail to a point where

millions of people across the country

rely on them. I'm guessing that a lot of

the people watching this shop at them

regularly. Now, the specific strategies

vary quite a bit between the different

chains, but the overall idea is to open

a bunch of smaller locations in

communities that may have trouble

accessing those large big box stores. In

the United States, the top three dollar

store chains combined for 37,000

locations. And I think that almost

anyone would agree that Family Dollar

has stood out lately as the least

successful of those three. Dollar

General has way more locations than any

other retailer in the country,

surpassing 20,000 of them in 2024.

Dollar Tree opened its 9,000th location

in 2025. That, keep in mind, tend to

have more square footage than the other

dollar store chains. Meanwhile, Family

Dollar has been closing locations,

recently becoming the smallest of the

three. I mean, just looking at that

graph, you can tell that Family Dollar

has been moving in the wrong direction.

But potentially the biggest evidence of

a decline is the fact that Family Dollar

has lost a lot of its value. In 2015, it

was acquired by Dollar Tree for over $8

billion. Dollar General was actually

bidding more money for it, but there

were fears concerning regulatory

approval given the fact that Dollar

General was already so big. So, the sale

ultimately went to Dollar Tree. For the

next decade, they struggled to operate

the two brands alongside each other

until 2025 when they sold it to a couple

of private equity firms for a little

over $1 billion, considerably less than

they had paid for it and helping to

expose how much the brand had fallen.

So, in this video, I would like to

explore the history of Family Dollar

while identifying what I believe to be

some of the biggest reasons behind its

decline. Starting off the list with

maybe the most direct reason, economic

factors. See, much like Dollar General,

Family Dollar has always tried to

attract lower income customers. That has

been their entire thing. Way back when

seeking out places to build a new store,

I guess the founder, Leon Lavine, would

search for oil stains in the parking lot

because that likely meant people who

could not afford to fix their car were

living nearby. And as you could imagine,

there's always been controversy

surrounding this approach, specifically

when they started selling tobacco

products in 2012 and then alcohol

products in 2019. Lately, as you may

already know, lowerincome individuals

have been dealing with inflation and

stricter requirements for SNAP benefits.

So, they simply cannot afford to spend

as much at Family Dollar or any other of

the dollar stores for that matter.

Dollar General has been having its own

issues and 99 cents only stores even

filed for bankruptcy in 2024. That same

year, the CEO of Dollar Tree, which

remember was the owner of Family Dollar,

said Family Dollar is a victim of the

macro environment out there. and

consider that when times are tough,

people are more willing to overlook

convenience and travel a little further

to somewhere else that might have better

prices. It is pretty straightforward

that their customer base has been facing

tough times and that has led to lower

sales at Family Dollar. So, moving on to

the next reason behind their decline,

Walmart. And there are so many ways that

we can look at this. I would argue that

historically the main competition for

dollar store chains has not been other

dollar store chains. It has been

Walmart. Throughout the 1980s, Walmart

was aggressive and grew to become the

country's number one retailer, partially

by targeting smaller communities, many

of which already had a family dollar.

The idea there was that Walmart would

build a store that was maybe 10 times

bigger, offering a better selection at

better prices, and that would motivate

people to overlook the convenience of

their local Family Dollar and travel a

little bit further to the Walmarts. So

then Family Dollar responded by opening

a bunch of stores in higher population

urban areas. Pretty much the exact

opposite of what they were doing before.

And to this day, if you are in a bigger

city, your chances of seeing a Family

Dollar are much higher than any other of

these dollar stores. Despite having

fewer locations overall, they were the

only ones to do this in a big way, and

the strategy remains questionable,

partially because of the specific

placement of these new stores. There may

have been a bit of a rush to scale the

business so that they can keep up with

Walmart's prices, leading to poorly

researched decisions and stores that are

simply too close to each other. Think

about that. If a new family dollar is

stealing sales away from an existing

Family Dollar, that becomes an

inefficient operation and is part of the

reason that they have been closing

locations. Not to mention the fact that

real estate and rent expenses tend to be

more costly in urban areas and crime

rates tend to be higher. So now

shoplifting and security costs have

become an issue for them. To summarize

here, Walmart kind of threatened their

original plan and the adjustments that

they made have led to some ongoing

issues. Going back to the list, I do not

think that being acquired by Dollar Tree

was the best thing that could have

happened to them. Despite being

categorized as dollar stores, I would

not say that the two of them are all

that similar. Dollar Tree targets

comparatively higher inome individuals

in suburban communities. They sell fewer

essentials and they have always been

much more concerned with that $1 or I

guess now $125 price point. Given the

fact that the two are more different

than it might initially seem, it was

difficult to integrate the businesses

and to find potential operational

efficiencies. It might be boring to go

into too many details here, but in 2020,

they even started opening combo

locations. You have to admit that is

kind of a cool idea to have two stores

under one roof like that. But much like

the companies themselves combining, I do

not think that there was ever much

benefit to doing it. And now that they

are separating, it looks like most of

those are going to become family

dollars. In the end, I think most people

can look back and say that the merger

was a bad idea for both companies. In

fact, I would argue that the biggest

impact from it is the next reason on my

list, the departure of the Lavine

family. Family Dollar was a fitting name

because for over 50 years, it was very

much a family company. Let me tell you

that the Lavine family has an extensive

history in the retail industry. Starting

out with Harry Lavine, who operated an

old general store in Rockingham, North

Carolina for many years before he died

in 1947. And at that point, his wife and

kids took it over, specifically his son,

Leon Lavine, who was only 12 years old

at the time. By 1955, the first Dollar

General opened in Scottville, Kentucky.

It was considered to be the first ever

dollar store and it sparked a bit of a

craze throughout the South where people

started opening their own versions of

dollar stores. Leon Lavine saw one of

these stores while visiting Tennessee

and was motivated to invest $6,000 to

open his own dollar store near his

hometown in Charlotte, North Carolina.

He says that for the first 10 years

leading up to it becoming a public

company, he would commonly work 16 hours

a day and he remained dedicated long

after that. Now, his son, Howard Lavine,

who was less than a year old when he

opened that first store, took over as

CEO in 1998, and he took over as

chairman of the board 5 years later when

Leon officially retired from the

business. By the time Leyon left, Family

Dollar was a Fortune 500 company with

around 5,000 locations. My point here is

that the Lavine family clearly had a

longtime personal attachment to the

business. Of course, not all the

decisions were ideal during that time,

and it can be debated that Howard had

trouble living up to his father's

legacy. But at the very least, there was

consistency and passion behind the

scenes. Well, in 2014, famous investor

Carl Icon bought a 9.4% stake in Family

Dollar. He essentially criticized

Howard's leadership and pushed for major

changes within the company. That is what

led to the Dollar Tree acquisition and

Howard leaving shortly after. Moving on

to my next reason behind the decline of

Family Dollar, and that is the fact that

the stores have been poorly maintained.

Now, you might be thinking that is kind

of the case with all of these dollar

stores, right? They're not known for

being the cleanest or the most

organized, but I think Family Dollar has

developed a little bit more of a

reputation for it. I would be curious to

hear about your experiences, but Family

Dollar has had issues keeping the

shelves stocked and orderly with the

appropriate products. A lot of it stems

back to supply chain issues involving

shipping and distribution centers. The

big thing that stands out here would be

a $42 million fine paid in 2024 that the

Justice Department described as the

largest ever monetary criminal penalty

in a food safety case. Disturbingly,

inspectors from the FDA found a bunch of

rodents at one of their warehouses in

Arkansas, and part of that report said

that there were dead rodents of various

states of decay. You might want to look

a little further into that one because

there are some surprising parts to it

and it represents a bigger issue of

neglecting to maintain their facilities

and some of their stores. All of it

giving customers further reason to

travel a little bit further to get to

that Walmart or wherever else. My final

reason on the list is really going to be

more of a reflection of the other

reasons and that is low profit margins.

More than the others, Family Dollar

emphasizes the sale of essential items

like groceries that tend to have lower

profit margins, meaning they have to

sell more of those items to make the

same amount of money. Do you see what I

mean? And how that can make things more

difficult? On average, they only make 24

cents for every dollar sold, whereas

Dollar General makes 30 and Dollar Tree

makes 36. So that margin has always been

thin and most of this video has been

about factors that have complicated that

issue. Family Dollar is comparatively

more vulnerable to falling sales and

rising costs. So this has been a

dangerous combination of factors that

have led to closing inefficient stores

and a sizable reduction in value. Family

Dollar is being left behind by those

other companies and it sure seems like

it would take some major changes for

them to reverse that trend. Let me know

in the comments what do you think about

Family Dollar. Specifically, is it a

good option for when you need something

quick or do not want to travel too far?

It just seems like there are not many

fans of Family Dollar out there anymore.

Their reputation has declined so much.

So, for anyone who prefers them over the

others, what do you like about it? Or on

the other end, it would still be

interesting to hear about something that

makes you dislike them more than the

others. I also want to mention really

quick that I made a video about all

these dollar stores a few years ago, so

I recommend watching that one if you

want to hear more about the others and

how they all compare to each other. And

finally, the big question is, what do

you see for the future? Will Family

Dollar recover under this new ownership

or will it continue to fall? And any

other thoughts you have about Family

Dollar, leave them in the comments. I'd

like to hear what you have to say. Thank

you for watching.