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The economics of dollar stores

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Re: The economics of dollar stores

#81

Post by Noos »

The article sort of conflates two different models. Dollar Tree is actual "everything in the store is a dollar" while Dollar General and Family General are mostly small retail stores that sell things at a variety of prices. They round prices to the dollar, but otherwise are traditional retail that just locates in unusual locations.

Five Below is another "dollar store" in that blend, focusing mostly on goods for young adults and teens. Originally everything was below $5, up to and including some video games and electronics like computer accessories or even drones.

It isn't too new of a niche, closeout retailers have often existed and its not uncommon with small businesses; ocean state job lot in the NE kind of exists with this model. I think what is unique is the small retail store model; dollar generals are as big as a walgreens or CVS, but stock a pretty full assortment of goods for the size. They are pretty impressive for being micro-super walmarts in a sense.

Dollar tree's are interesting because you can actually find books and dvd/blu-ray there. It's sort of a commentary on how tough it must be to be a creative when I can buy remnant books from A list authors sometimes; I've seen Jonathan Franzen, John Scalzi, Bill Mckibben, And Rod Dreher books end up in the dollar bin. There's also a staggering amount of generic animated dvds in the pixar/disney mode.

Re: The economics of dollar stores

#82

Post by nelblu »

NikolaNovak wrote: post #15

Interesting; most stores are similar or same brands in Canada vs USA (with noble exception of Tim Hortons). But we have Dollarama and Buck Or Two, whereas top US are completely different. I wonder if it's because Canadian supply chain logistics tend to be different (Target famously flopped for not taking that into account), or some other factor.

Dollarama also doesn't accept returns. Not sure about the US stores, but that is another reason why they must thrive.

Re: The economics of dollar stores

#83

Post by lotsofpulp »

mrfusion wrote: post #58
kcorbitt wrote: post #2

I absolutely love dollar stores. I recently needed to buy a set of crayons for my son and the options were $5 on Amazon, $4 at Target or $1 at the local Dollar Tree (and the pack had 36 crayons, vs 24 from the other sources!). They're not the right place for everything, but for kids' art supplies, cleaning products, party paraphernalia, seasonal decor, etc, they can't be beat. They seem to have a pretty strong stigma…

Agreed. The cheapest I could buy a plastic spatula on amazon was $7? Bought one for a dollar instead. Seems to work fine.

That might be one of the easiest use cases for me to justify spending more on quality, not that I would trust Amazon to sell quality, but from a reputable brand or retail store.

I am assuming that a plastic spatula will degrade when heated up, and a lower quality plastic will have a higher probability of degrading and depositing plastic into the food being cooked, which then gets ingested of course.

Re: The economics of dollar stores

#84

Post by wirthjason »

Clewza313 wrote: post #32

100 yen (approx $1) have long been huge in Japan too, and their business model is even simpler: most of what they sell is plastic and made to order in China in huge volumes. They have grocery selections too, but nothing that would require refrigeration or otherwise spoil quickly. And while hardly luxury, they're also not down-market in the way that Dollar X's in the US are, many are located in central business distri…

They are popular because they are good. The products have good designs and reasonable quality, at or above the $1 level. The stores are bright, clean, and the staff friendly.

My guess is that they have a much more integrated supply chain than the stores in the US and can better understand what their customers want/need.

There is an air of quality around ¥100 shop shop and a stigma of $1 stores being junk. Any reasonable Okaasan takes it as a badge of honor finding good stuff and bragging about it.

Re: The economics of dollar stores

#85

Post by Scoundreller »

PopePompus wrote: post #77
atlanta90210 wrote: post #53

Family Dollar operates a store near me in Atlanta. Their parking lot is so filthy sometimes the neighbors organize to go clean it up. It appears to me Family Dollar hates their customers given the food choices, the attitude of the employees and how they maintain their property. I avoid them all.

I've been struck by how ugly some stores catering to the poor are. Not ugly because they are cheaply decorated, but intentionally ugly, using things like black on yellow coloring for signage, etc. I guess it's eye-catching, but not in a good way.

Or maybe to signal "yeah, we can afford to shop here"?

Like, my dentist's office is really nice. Not just clean, but very nice. I seem to be the only one in our family that realizes that we're the ones that paid for that. Better than charging the same amount for a dumpy office, but makes me wonder how much we've been overpaying.

Even a fancy restaurant will follow the 5second rule in the kitchen, but it will be a nicer floor they're picking it off of. (I never understood granite countertops... they're porous! The last thing you'd want in a kitchen).

Re: The economics of dollar stores

#86

Post by jjice »

I personally always considered the "general" stores, and considered Dollar Tree the main "dollar" store out of the bunch. I think these stores are super interesting though, because, growing up in a town with a Walmart and Target, there was no reason for me to go to a Dollar General. However, when my friends and I would go camping, the only store for miles and miles would be a Dollar General, and it was relatively booming. The stores aren't bad by any means, but limited and a bit more costly, but I get an odd feeling of coziness if they're the only real store in town.

Re: The economics of dollar stores

#87

Post by bradleyjg »

Noos wrote: post #81

The article sort of conflates two different models. Dollar Tree is actual "everything in the store is a dollar" while Dollar General and Family General are mostly small retail stores that sell things at a variety of prices. They round prices to the dollar, but otherwise are traditional retail that just locates in unusual locations. Five Below is another "dollar store" in that blend, focusing mostly on goods for young…

Paperback books that don’t sell are discarded so as not to compete with long tail purchases but hard cover books are expensive enough in terms of production and distribution that the end up getting discounted instead.

Re: The economics of dollar stores

#88

Post by mcshicks »

tkgally wrote: post #66
Clewza313 wrote: post #32

100 yen (approx $1) have long been huge in Japan too, and their business model is even simpler: most of what they sell is plastic and made to order in China in huge volumes. They have grocery selections too, but nothing that would require refrigeration or otherwise spoil quickly. And while hardly luxury, they're also not down-market in the way that Dollar X's in the US are, many are located in central business distri…

Daiso, the largest chain in Japan, designs a lot of their own products, and the shear variety of some product lines is one of the stores’ attractions. Twenty years ago, before going back to the U.S. from Japan for a family reunion, I bought fifty folding fans, each with a different Japanesey design, at Daiso as gifts. The relatives I handed them out to seemed delighted, and they cost me only a buck apiece. Until I st…

There are Daiso locations in the US (and I think many other countries now), at least in California. They aren't as good as the ones in Japan, and they have somewhat different items in one location than another. But they do have lots of interesting stuff, although most of it is $1.50 and up. The tool section is pretty neat as well as their stationary section.

Re: The economics of dollar stores

#90

Post by Liron »

kaptain wrote: post #35

It’s expensive to be poor.

On the contrary, we should appreciate that every single item in the dollar store is a marvel of modern economies of scale that benefits all customers, poor ones most of all.

Show a modern dollar store to a Soviet Russian in 1989 or anyone from 100 years ago and they’d go nuts.

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