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The economics of dollar stores

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Re: The economics of dollar stores

#131

Post by mherdeg »

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…

Ocean State Job Lot is fun. Also in New England I love the Marden's business model. As far as I can tell from the advertising it really is a family business that's hit its scaling limits at about 15 stores -- when you walk in you see whatever remnant stuff a member of the Marden family thought people would like to buy when they went shopping for remnant inventory. Like they list the names of people who buy this stuff on their web site: https://www.mardens.com/sell-to-us/

They even have a special type of store dedicated to flooring and I feel like this reflects the family structure somehow (like a niece or nephew is really into flooring or something). It's just such interesting retail.

Re: The economics of dollar stores

#132

Post by IncRnd »

the_lonely_road wrote: post #112
wombatmobile wrote: post #25

Earlier quoted context omitted.

That's called a loss-leader strategy. It's the same strategy fishermen use when they invest a small amount of money at the bait store before a fishing trip. As you said, it's a lure. The strategy is not exclusive to dollar stores. > Like other retailers, a dollar store's interior layout is set up so that commonly purchased staples like cleaning supplies and milk are in the back of the store. This requires shoppers to…

I disagree with your characterization of this being non-independence of thought. You don’t know what you don’t know. It’s not on your list because you didn’t want it when you went to the store. You saw it, and now you know about it, and now you want it, so you buy it. I never understand people who try to make this seem nefarious. You walk past 10,000 things you didn’t think about and don’t want so you just walk past…

Nobody called it "nefarious shopping." It is called "impulse buying," and stores are configured to maximize impulse buys whether through candy at the checkout lane or something else. Stores are arranged in the front decompression zone, the front, the center, checkout, etc. for this reason.

Re: The economics of dollar stores

#133

Post by gruez »

lotsofpulp wrote: post #108
paul_f wrote: post #102

Earlier quoted context omitted.

It could be quite difficult to tell the difference between the two spatulas. They might be identical. Just because it costs more is no guarantee of higher qualify.

As goes with everything in life, nothing is certain. But I operate under the assumption that there is a higher probability that a reputable brand known for selling higher quality goods is actually selling higher quality goods and performing the necessary quality control measures to ensure it. Of course, one also has to remain informed on which brands are decreasing their quality and cashing in on their reputation.

Well GP was talking about amazon, so there's a fair chance that the $7 was also low quality chinese junk,and if you wanted higher quality stuff you'd need to shell out $15 at least.

Re: The economics of dollar stores

#134

Post by mkr-hn »

eigen wrote: post #125
mkr-hn wrote: post #71

Earlier quoted context omitted.

The Cash for Clunkers program destroyed the used car market in the US. It's slowly recovering as cars from the 2000s and 2010s enter it.

the CARS program ran for 1 month in 2009. so it didnt affect 2009 and later model years. it appears to have increased new car sales in 2009 so it should positively affect the used car market in later years as those new cars moved to the used car market. please explain how the used car market is "slowly recovering" 11 years later.

It took almost 700,000 of the most affordable cars off the market. That plus the reliability of newer cars means they stay with their original owners longer, so there are fewer used cars on the market at prices people can afford. Used car prices are still out of reach for too many people even before factoring in things like insurance and registration.

Re: The economics of dollar stores

#135

Post by [deleted] »

WalterBright wrote: post #120

The article mentions they'll have to get creative when inflation makes the dollar worthless, or do a little rebranding. Motel 6 did the same thing. I remember when the 6 meant six bucks a night. It was a great place to catch some Zs when on a road trip. My dad said the "Nickle Bar" candy bar's size grew and shrank with the cost of chocolate.

[deleted]

Re: The economics of dollar stores

#136

Post by DangitBobby »

powerapple wrote: post #19
melling wrote: post #5

Earlier quoted context omitted.

The article claims that Dollar Stores are more expensive. They often sell smaller amounts to meet the price, but unit cost is more

That's not "expensive". Expensive is that I need to pay $1.99 for something and I have throw away half of it because I couldn't use it. I'd rather spend $0.99 for 1/3 the quantity. I am spending less money after all.

Which doesnt apply to deodorant, toothpaste, cleaning supplies... or much of anything that Dollar Tree sells. Unless you are throwing it away for some reason other than that it went bad like you had to buy some because you are traveling, in which case, you are not at all the normal customer.

Re: The economics of dollar stores

#137

Post by tshaddox »

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…

I remember Dollar General carrying cheap/generic brands growing up, but when I went to one last year it seemed indistinguishable in selection and pricing to a Walmart or similar large chain grocery store.

Re: The economics of dollar stores

#138

Post by [deleted] »

gumby wrote: post #70

The article itself is quite interesting: short, simple sentences and many colorful graphics. It looks like it could be from a middle school textbook. But the content itself is not simplistic. Is it intended for a segment in which this is common?

[deleted]

Re: The economics of dollar stores

#139

Post by tshaddox »

lotsofpulp wrote: post #108
paul_f wrote: post #102

Earlier quoted context omitted.

It could be quite difficult to tell the difference between the two spatulas. They might be identical. Just because it costs more is no guarantee of higher qualify.

As goes with everything in life, nothing is certain. But I operate under the assumption that there is a higher probability that a reputable brand known for selling higher quality goods is actually selling higher quality goods and performing the necessary quality control measures to ensure it. Of course, one also has to remain informed on which brands are decreasing their quality and cashing in on their reputation.

Buying from a brand with a reputation is very different than assuming a more expensive item is higher quality.

Re: The economics of dollar stores

#140

Post by riffic »

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 has a presence throughout Los Angeles, and it is definitely a different animal than your typical dollar store.
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