In the old days, thrift general merchandise stores were literally called “Five-and-Dime” stores. F. W. Woolworth created the concept in the late 1900’s and virtually every main street in America (and Canada) contained one of these variety stores, the precursor to general merchandise retailing as we know it today. With over 1000 stores by the 1960’s, they were the Wal Mart of their time. They lasted through World War I, the Great Depression and World War II.
Today, the basic business model has certainly been proved out mainly by Wal Mart. Granted, Wal Mart is on a much bigger scale but they certainly modernized the concept. The similarities are staggering: Low prices; endless supply of general merchandise; mediocre / non-descript store layout and design; outstanding real estate; and large footprints. If you think about what the five-and-dime grew up to be, it certainly has to be Wal Mart. Even Lee Scott, the retiring CEO, mentioned this past week that “Sam Walton built this business for economic times like these”. Indeed, Sam understood the five-and-dime concept intimately. Better yet, he knew that to survive long term and not become obsolete like Woolworth’s did, he would have to modernize the concept. That meant to him: bigger boxes; prime suburban real estate; the most revolutionary logistics retail has ever seen; and the lowest prices anywhere. He certainly captured the minds and wallets of a nation or two.
But there are other segments that were created out of the five-and-dime image. For instance, the dollar store phenomenon has blossomed with more than 27,000 stores expected to be open in the U.S. by 2010.
However, there is a hipper version of the five-and-dime that I really admire. 5 Below was born in the New Jersey / Philadelphia corridor and now boasts 80 stores on their way to 200. They feature general merchandise in approximately 5-7,000 square feet of strip plaza type space that is targeted to kids and teens. Candy, licensed sports merchandise, t-shirts, stuff to decorate your room, a variety of balls and games that inspire the younger set are all on display in a stuffed store, but one with clear, wide aisles. This concept actually seems closest to the original five-and-dime offering from the early years. Everything is $5 or under as the name suggests and they ensure they keep things fresh and carry only the hottest trends that are available at that price point.
In this economy, these new aged five-and-dimes should thrive. However, from now on, we will have to start calling them five-and-tens owing to the fact that prices have increased 100 fold since the good old days when five-and-dimes were born.