07/04/2007

Woolworth Gone But Not Forgotten
By Bob Lassahn

F.W. Woolworth

F. W. Woolworth was among the first five-and-dime stores selling discounted general merchandise at fixed prices and undercutting the prices of local merchants. It was also one of the first stores to put merchandise out for customers to inspect and select without the assistance of a sales clerk.

Born in 1852 at Rodman, NY Frank Winfield Woolworth was 26 years old when he borrowed $350 from a former employer and opened his Utica, NY "5-cent" store in 1878. The store failed within one year. Undeterred he opened a second store on June 21, 1879 in Lancaster, PA and found success. From that point Woolworth never ceased opening and buying new stores until the time of his death in 1919 when the total had reached 1,250.

It was actually Frank Woolworth's fourth store, opened on November 6, 1880 in Scranton, PA that first used the "5-&-10 cent" or "five-and- dime" store name. By the end of 1890 he ran 12 stores, in 1900 there were 54, by 1910 the total was 238 and by the time of the 1911 merger that created F.W. Woolworth & Company he was running 319. When Frank Woolworth merged his own stores with his brother Charles' 15, his cousin Seymour Knox's 98, Fred Kirby's 96, Earle Charlton's 35 and William Moore's two, Woolworth became the first retail company to operate stores in all 47 states. When Arizona joined the Union as the 48th state in 1912, Woolworth already had a store located there.

Frank Woolworth quipped that he wanted "to open a store in every civilized town throughout the world" as he expanded into England in 1909, then moved on into Germany, Canada, South Africa, and elsewhere. Critics rose up to complain that Woolworth was creating a monopoly. Negative public reaction to "the chain store menace" of Woolworth in the 1930s was similar to the disdain expressed as Wal-Mart brought its stores into communities during the 1980s and 1990s. It is known that Woolworth did in fact try to either drive out, or buy out its competition in many areas, realizing that the locations could not support more than one general merchandise store.

In response to this unbridled growth Missouri Congressman John J. Cochran proposed federal legislation that threatened to tax Woolworth's into collapse. In 1935 he spearheaded a congressional investigation into what was labeled the "super-lobby" of chain store interests with Woolworth and A&P (a grocery chain) as the primary targets. However, a 1939 bill that would have broken up the chains never made it past committee and Woolworth forged ahead.

Woolworth remained a true "dime store" for more than half a century, until in 1932 the top price for merchandise was raised to 20 cents. In 1935 the limited price policy was finally dropped as the company expanded into higher priced merchandise including furniture and appliances.

Despite offering low prices to customers, Frank Woolworth paid employees better wages than most of his competitors. He introduced minimum wages for all positions, offered paid vacations and handed out Christmas bonuses. Such perks for employees were rare during the early days of the 20th century. Woolworth's stores were also a major employer of women.
The "five-and-dime" store was a central place in American life from before 1900 until after World War II and Woolworth was the original and dominant dime-store chain. In the first half of the twentieth century the main street of virtually every town and city in the United States featured a Woolworth. In addition to offering customers a wide assortment of affordable household goods, the dime store's lunch counter was also a common meeting place.

While it filled a niche in American lifestyle during the first half of the 20th century, as the culture changed after World War II Woolworth found its importance waning. Other store chains began to copy Woolworth's low price approach and the original became just another department store in the mix.

In the early 1960s the 2,850 Woolworth's stores sold large quantities of merchandise but managed a very slim profit margin. The flagship stores were still doing well, but the company wanted to further tap into the growing discount department market while still maintaining its position in the variety store business.

In 1962 the F.W. Woolworth Company opened a subsidiary chain of stores in the U.S. and Canada called Woolco, widely considered to be Woolworth's response to S.S. Kresge Corporation's Kmart stores. The first Woolco stores opened on the outskirts of Columbus, OH and after proving successful triggered growth that saw 18 locations in the United States and nine in Canada by 1966. Woolworth planned for an additional 30 per year leading to tremendous growth and more than 300 Woolco stores throughout North America by the mid 1970s.

Beginning in the late 1970s Woolworth enacted a cost-saving plan for Woolco, but by 1979 as the company celebrated 100 years and was named the largest department store chain in the world by the "Guinness Book of World Records," it was obvious the cost-saving plan would not be enough. Woolco ceased operations in the United States in 1983. On October 15, 1993, Woolworth embarked on a restructuring plan closing half of its 800 plus stores in the U. S. and converting Canadian stores to a closeout division named The Bargain Shop. Woolco survived in Canada until 1994, when the majority of its stores there were sold to Wal-Mart.