AUDIE CORNISH, HOST:
The recession hobbled the U.S. economy and crushed a lot of businesses. Some also did really well during that time, like dollar stores. Shoppers flocked to them. As the economy has improved, one chain, Family Dollar, hasn't kept pace with its competitors. Today, shareholders voted to sell to a rival, as Ben Bradford of member station WFAE reports.
BEN BRADFORD, BYLINE: For those who haven't been to one of Family Dollar's 8,000 U.S. stores, they sell paper towels, sodas, children's clothes, but these things don't actually cost a dollar. Inside a store in Charlotte, shelves have a range of prices.
There are car fresheners that are $2.65, dog treats for $4 and...
(SOUNDBITE OF TOY TRUCK)
BRADFORD: That's a plastic toy monster truck - $10.
Outside in the parking lot, Michelle Williams has just finished her shopping and she clutches a small bag.
MICHELLE WILLIAMS: Well, I just bought some chips, a soda and some jelly beans (laughter).
BRADFORD: And some jelly beans. All right.
This, Williams says, is where she does most of her shopping for everything.
WILLIAMS: Especially when you're limited on money and can't get the stuff that you need out of grocery stores. The same thing in the grocery store is in here, but cheaper.
BRADFORD: But today, Williams is one of the few customers here. And that's been one of the problems, says retail consultant Howard Davidowitz. Since the recession, profits have risen, but not very fast.
HOWARD DAVIDOWITZ: At the end of the day, Family Dollar fell on their face 'cause they didn't execute correctly. And they allowed their competitors to beat their brains in. They've been closing stores like crazy in a segment where everybody is opening stores. What does that tell you?
BRADFORD: It told the company's two other big competitors it was a good time to buy. In July, executives worked out an $8.5 billion deal with Dollar Tree, a smaller rival. The biggest discount store, Dollar General, quickly made an even higher offer - $9 billion cash, including a half-billion dollar deposit.
GARY BURGESS: Why didn't we take it?
BRADFORD: Gary Burgess owns 200 shares with his wife and came to the vote in Charlotte. He wasn't happy.
BURGESS: If it didn't go through, we walk away with half a billion dollars. To me that's a hell of a good deal.
BRADFORD: Family Dollar executives agreed. CEO Howard Levine admits it was better on paper, but executives wanted the lower bid and shareholders approved it today. Board member and former North Carolina Commerce Secretary Sharon Decker says the smaller bid is the right one.
SHARON DECKER: Both deals were very good offers and what we wanted was certainty. Communities depend on these stores, so bringing certainty to that was very, very important. So that was a big part of this decision.
BRADFORD: Mergers between such large companies require approval from the Federal Trade Commission. Had Family Dollar chosen the higher bid from Dollar General, the FTC said it would want to close 4,000 stores to prevent a monopoly in some markets. The accepted deal is different. All of Dollar Tree's items are a buck or less, so not as much conflict. Only about 300 stores are expected to close, and Family Dollar's headquarters will remain in the Charlotte area.
Dollar Tree also promised to keep the CEO of Family Dollar, Howard Levine. His dad, Leon, founded the company in 1959. It's a prominent name in Charlotte - Levine Center for the Arts, Levine Museum of the New South. And under the terms of the merger, the name Family Dollar will stick around, too. For NPR News, I'm Ben Bradford in Charlotte.