Family Dollar Hopes To Hook Low-Income Shoppers With Cigarettes

UPDATE: This story has been updated to reflect a statement from Leon Levine, founder of Family Dollar.

In the fight for low-income shoppers, Family Dollar has unveiled a new weapon: cigarettes.

The Matthews, N.C.-based dollar store will start selling cigarettes and tobacco products in the next several months, president and Chief Operating Officer Michael Bloom said on a conference call with analysts Wednesday.

Family Dollar shoppers smoke more than average, but until now have been getting their fix elsewhere. "Tobacco is about a $90 billion business that drives very frequent trips," Bloom said. "Our customer research tells us that Family Dollar customers overindex on cigarettes and tobacco products. Soon, our customers will be able to come to our stores for these products."

Family Dollar didn't respond to a request for comment Thursday afternoon.

None of Family Dollar's chief competitors -- Dollar Tree, Dollar General or 99-Cent Only -- sell cigarettes. Dollar stores also typically shy away from selling alcohol, though in the past two years Dollar General and Family Dollar have experimented with selling beer and wine.

Family Dollar's "core customer" is on a tight budget, making $40,000 a year or less per family. Though company officials believe that the economy is improving overall, its "core customer is stressed and continues to be stressed," CEO Howard Levine told analysts on Wednesday's call.

Family Dollar is already using other tactics to lure stressed Americans to its stores. The chain is in the process of reinventing itself as a discount grocer, where shoppers can get packaged and frozen food, as well as staples like milk and eggs, on the cheap. In the last three months, Family Dollar increased its inventory of "consumables," or food and household goods, by 18 percent in the past three months. It's also planning to double its freezer and refrigerator space by the end of 2012.

So far, the strategy is working. Sales in stores open at least a year rose 4.5 percent in the last three months, with sales of consumables increasing 13 percent.

"More and more people are visiting their local Family Dollar to save money on the things they need every day," Levine said on the call.

While Family Dollar shoppers may pick up cigarettes in an attempt to soothe stress, the move likely won't be doing them any favors in terms of health, as doctors at North Carolina's Levine Cancer Institute know too well. The Cancer Institue, which will open this fall, was established thanks to a $20 million donation from Family Dollar founder Leon Levine, father of Howard Levine, the company's CEO.

Leon Levine, Chairman of the Board of Directors of the Leon Levine foundation, retired from the board of Family Dollar in 2003. "Since that time I have held no position with Family Dollar Stores as a director, executive, major shareholder, special advisor or in any other capacity," he wrote in an email. "My foundation fully supports its grant to establish the Levine Cancer Institute and believes that the Institute will improve the lives of thousands as it will redefine the delivery of cancer care in the Carolinas."

Now, at least, North and South Carolina shoppers can rest assured that if they buy cigarettes at Family Dollar, the Cancer Institute will have their backs down the road.

Comments

[LegacyForHealth]

04:10 PM on 05/22/2012

Legacy has been following this issue since this story was posted. Approximately a dozen national public health and advocacy organizations are urging Family Dollar to reconsider its decision to sell tobacco products in its stores nationwide: http://www.legacyforhealth.org/5092.aspx

Legacy is urging individuals and groups to take action on this issue: http://www.legacyforhealth.org/Documents/National-Day-of-Action.pdf

[smokefree]

02:53 PM on 04/08/2012

Readers who think Family Dollar should reconsider their ill-advised business decision to make tobacco products more accessible to low income individuals should write to the company at the following website: http://corporate.familydollar.com/pages/contactus.aspx

[mywish]

09:27 PM on 04/04/2012

Don't get confused people. This will not increase tobacco consumption. The people that currently smoke and shop at Family Dollar just buy their smokes someplace else. Now they will have the option to buy them at Family Dollar. It's not going to encourage people to smoke any more or less.

[GrimReverb]

07:47 PM on 04/01/2012

There was a 99 Cent Only store where I lived in East L.A. They sold these absolutely horrible bottles of wine that would make the most hardened alcoholic gag. I would just buy some seven-up, mix them together and voila, I had a few tasty wine spritzers for a couple bucks.

[Sergeant2]

02:36 PM on 04/01/2012

Liquor & Wine stores, Convenient stores, Super Markets, Pony Kegs, Neighborhood Grocery stores and Gas Stations have been selling discount generic brand cigarettes for 50 yrs. In all that time I have never heard anyone accuse them of Hoping to Hook Low-Income Shoppers With Cigarettes. This article is a case of creating a story where there is none.

[demilieu]

01:47 PM on 04/01/2012

Try not to smoke. Try to quit. Every time you put a smoke down you're doing yourself a big favor. Drink a glass of water and relax.

[LegacyForHealth]

04:04 PM on 05/22/2012

I work at Legacy and we run a free online quit smoking program called BecomeAnEX.org. The plan helps smokers re-learn life without cigarettes and connects them with a community of quitters who are going through the same struggle/success.

[demilieu]

01:46 PM on 04/01/2012

Either way, smoking is a bad habit that will eventually ruin your health.

[Valerie Keefe]

05:38 PM on 04/01/2012

Usually, and I don't like the odds (650/100,000/year), but let's not confuse a really bad bet with certain death.

[reaason saves]

12:22 PM on 04/01/2012

Wow. This is hard to read. I have struggled with on and off smoking for years and I understand how hard it is to quit and sometimes a cigarette feels like an affordable "reward"- flawed though that thought is.

Still, I think that luring lower-income customers in with cheap cigarettes is the wrong thing to do. The last thing they need is the long-term health problems that come with smoking. I've smoked and not smoked, and my energy and mental outlook are MUCH better not smoking.

[Dylan 1992]

01:35 AM on 04/01/2012

Yeah this story sure hits home pretty well.. I work for Family Dollar as a "Service Assistant" which is a part time management position- where they work you like a manager, except you don't get the pay, the benefits, or the respect like full time managers do. This past week, our store manager informed us that our store will be selling alcohol by the end of this summer. I am not 21 years old, so I will be demoted back to a cashier. I have performed pretty much slave labor for a company that is going to take away hours, and pay from a dedicated employee who has worked their a** off for the past year to keep. I want to thank Family Dollar, and our awesome CEO Howard Levine for not realizing the set backs he is putting on some of his employees just to earn some extra revenue by selling alcohol to low income families, and drug dealers (much like the ones that run around the neighborhood that our store sits in), this will make the convenient everyday dollar store that Family Dollar has imaged to its customers- into an unsafe place for the single moms, and children it supposedly attracts.

[Perpetual Now]

01:48 PM on 04/01/2012

Good comment.

[Joseph LeCompte]

11:54 PM on 03/31/2012

Selling a legal product is legal. Even though I hate that cigs have killed family members. Those thing ruin you more than the de stress and pleasure is worth.

[ruburnt]

08:53 PM on 03/31/2012

After seeing a lady spend $50.00 for a carton of Marlboro's..I guess there is a need for a cheaper alternative for smokers....

[aseyeseeit]

08:40 PM on 03/31/2012

A company based in NC making smoking more convenient-not surprising and helping to create the clients they will deliver care to from their Cancer Care Institute. Tobacco- a real money making industry.

[Iatros78]

07:52 PM on 03/31/2012

This is truly despicable. There must certainly be joy in the board rooms of Big Tobacco, though. Big Tobacco has adopted a global strategy of targeting poor, uneducated people in the Third World for addiction to their deadly products, especially women and children. Family Dollar's decision just helps Big Tobacco extend that strategy domestically. According to the World Health Organization, tobacco is projected to kill a billion people this century (compared to 100 million killed in the 20th century). It's nice to see that Family Dollar is doing its part to make those 1 billion deaths a reality.

[JackBlair69]

07:48 PM on 03/31/2012

The Dollar General Stores near me do not take MasterCard for some reason. They take Visa.

These stores could likely double their traffic by merely accepting MC as well.

[demilieu]

01:50 PM on 04/01/2012

Has to do with the transaction fees Mastercard is charging them, I'd think. Their finance people have done the numbers and to them the trade-off works.

[JPETERB]

11:35 AM on 03/31/2012

Prey on the poor with addictive toxic products, preserve the rich tobacco corporation's freedom to do so. Ain't the free market wonderful? Addictive over-the-counter traditional drug poison for less.

Last time I set foot in a Dollar Store. I will economically vote against all these corporations by avoiding spending my income at any store that sells tobacco products.