History of Woolworth's Five and Dime Stores F.W. Woolworth Store, Lexington Kentucky
F.W. Woolworth started his first successful variety store in Lancaster, Pennsylvania in 1879. His idea was to sell items for five cents apiece with the philosophy that high sales volume matched with low-profit margins still would turn a profit. He also revolutionized the way that retail stores operated. He expanded upon the general store concept by allowing the customers the ability to pick up items without having to ask for assistance from a salesperson. The success of the variety store rested on the fact that for the first time, a wide array of goods at inexpensive prices were made available to people of modest economic levels. Woolworth's sold everyday household and personal items at bargain prices. The basic marketing foundation was to sell a volume of low-priced items themselves which generated a small profit on each sale. The goods could be bought in bulk from manufacturers to reduce costs. Eventually, Woolworth added ten-cent items to the inventory since he could only sell a limited amount of goods for five cents. This set into motion the birth of the five-and-dime empire that would have reverberations on retail shopping patterns in the twentieth century.
The Woolworth variety store became one of the first chain stores in America. The power of the chain was fed by the ability to buy goods from manufacturers at bulk prices which enabled the chain store to sell items at lower prices than the local merchants. The new chains were benefiting from improvements in manufacturing and railroad transportation that resulted from the Industrial Revolution. The increasing population of immigrants provided an instant customer base for dime stores since these were people who tended to be at the lower end of the economic scale. The westward migration of the population opened up attractive new markets for the chains. Woolworth's began expanding into these new markets from mid-1886 to 1905.
The success of Woolworth's marketing strategy was to target people of modest means. The "Everybody's Store" was a part of the company's logo. "Everybody" included large segments of the population that had been ignored by other retailers but who also had pent-up consumer demand. Woolworth's and other dime stores were affordable to these people so that they too, could indulge their materialist desires. People could buy items that might have been previously inaccessible to them otherwise even though the products might not be the finest quality. Woolworth's clearly understood that children were an untapped market source. Woolworth's cleverly filled display cases full of candy and toys. Children could afford to buy trinkets and treats because they were so inexpensive. The five-and-dime also propagated a vast amount of material goods to adults-; costume jewelry, housewares, clothes, make-up, perfume, tools, and notions occupied Woolworth's sales floors. Woolworth's also cashed in on seasonal items for holidays and parties, a new concept in merchandising. All of the "nickels and dimes" spent added up to large corporate profits while fueling a healthy consumer culture and filling the world with copious amounts of dime-store material culture.
Main Street locations for the stores were a Woolworth policy. Downtown was the traditional retail center of any town at this time. It made logical sense from a marketing standpoint to be situated in the focus of commercial activity. Competition for Woolworth's in the dime store arena began as soon as the economic success of the chain was evident. Several dime store chains emerged to ride the coattails of Woolworth's stores. Kress, Kresge, and McCory's, as well as many others, adopted the five-and-dime concept even down to the red front masthead.
Dime stores continued to prosper into the 1930s despite the Great Depression. Woolworth's actually benefited from the Depression because the goods the chain sold were so inexpensive. This success allowed the company to generate profits and expand at a time when other retailers were struggling with sales. Woolworth's had over two thousand stores by 1939 which represented the addition of approximately 500 new store locations since 1929. It was during the Depression, that Woolworth's changed its fixed price policy that had kept items at five and ten cents. In 1935, the Board of Directors officially ended its limited price policy. The corporate decision to lift the price limits increased the profits of the company, which allowed for a further expansion of the chain, as well as an expansion of the range of goods that could be sold.
Consequently, this change had repercussions throughout the chain, as the corporation began to abandon its original concept of locating in existing storefronts and started investing in new buildings. "Woolworth Moderne," as Ada Louise Huxtable refers to it, was the result of a culmination of factors. During the Depression, the "Modernize Main Street" movement was fomented to encourage customers to shop. The idea was to update the image of storefronts by using modern styles and materials. This was, in large part, fueled by manufacturers of construction materials who were promoting their own products like aluminized brick, Vitrolite and terra-cotta.
The architectural expression that was chosen to communicate the modern message was Art Deco, and more specifically its derivative, Streamline Moderne. The Deco aesthetic was meant to be a new form of architecture that abstracted historical references and ornament in modern materials. The public premiere of Art Deco occurred at the 1925 Paris Exposition Internationale des Arts Decoratifs et Industriels Moderenes. Though architecture in the Art Deco language was not featured at the exposition, the style was quickly adapted to buildings. Deco used verticality and geometric forms to express a modern look and was used throughout the 1920s. The second incarnation of the Deco aesthetic took the form of Streamline Moderne in the 1930s. It is characterized by a smooth, curved, machine-like appearance that came from the scientific obsession of making objects more efficient. Streamline Moderne evoked a sense of motion that was amplified in planes, cars, and trains. Streamlining began to seep into many aspects of material culture as the industrial designers were brought in to revamp almost everything that could be sold to the consumer. Placed in the context of the Depression, Streamline Moderne evoked a sense of progress and a renewed faith in the future as well as reinvigorating interest in consumption.
Like many commercial businesses, Woolworth's readily incorporated the modern style of Art Deco and Streamline Moderne into their store designs. The intent was to draw customers into stores through the use of this progressive imagery. Dime stores, in particular, wanted to project shopping efficiency because a customer could satisfy all of their needs under one roof. Streamline Moderne underscored the expression of efficiency and reinforced the notion that Woolworth's was a modern, up-to-date retailer. Woolworth would continue to hold on to this design motif into the 1950s even after Streamline Moderne went out of vogue.
The Woolworth variety store chain's most successful period of retail business was from the 1930s to the 1960s which coincided with their largest expansion of store plants. By the 1970s and 1980s, the Woolworth corporation began to enter the discount store arena that had been defined by S.S. Kresge's shift to K-Mart stores. The Woolco division of Woolworth began in 1962 and represented a major transition from its dime store image. Woolworth's also delved into specialty store ownership departing from the variety store concept. This further diversification diluted the five-and-dime roots of the corporation. By the 1990s, the corporation recognized that the dime store concept was no longer viable and began closing store locations. The corporation recognized that the shopping habits of Americans were changing since people could buy the same products sold at Woolworth's in suburban discount superstores such as Wal-Mart, which had ample parking lots. Downtown locations became less desirable to shoppers because they had become accustomed to the convenience of the suburban retail stores. The lack of big-ticket items available in the dime stores also contributed to the loss of sales. In 1997, the company decided to close all of its Woolworth locations and focus on its specialty store holdings. This decision ended an era of retailing that had shaped consumption patterns for the first half of the twentieth century.
