Dollar stores make up nearly half of all new store openings in the U.S. • Hacker News Board

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#31

Post by tshaddox » Mon, Aug 02, 2021, 5:33 PM UTC

jcims wrote: post #16

It's not clear to me what the problem is that the article is outlining. The Dollar General near me has the exact same brands as you would find in any larger retail establishment, they just have found a way to stock the 80% that folks typically need. They are filling a niche between the gas station convenience store and traditional grocery/big box retail. They don't have a produce section, just a bit of fruit. Is that…

It's always odd to me to throw Dollar General into the same category as Dollar Tree.

Dollar Tree is an actual "dollar store" where literally every item costs $1. Dollar Tree's items are generally no-name discount brands that wouldn't be found in big grocery store chains, or familiar brands in unique very small packages.

Dollar General, at least in the two parts of the US I've seen them in (areas of California and the Midwest), is as you describe: something between a convenience store and a traditional grocery store sans produce. They have all the normal big brands: Oreos, Doritos, etc. in the normal package sizes at what seemed to me to be normal grocery store prices.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#32

Post by jcims » Mon, Aug 02, 2021, 5:34 PM UTC

singlow wrote: post #23

seibelj wrote: post #7

The gut-reaction is that this is some horrible thing rather than a scalable business model that provides low-cost goods to customers in rural areas that were previously underserved. My family in rural Oklahoma and Texas have to drive over an hour to Wal Mart, the dollar stores have a similar but curated subset of goods at a cheap price, and the distance is much closer. HN monoculture loves to crap all over things lik…

I think many believe that the dollar store preys on shoppers who may think they are getting a better deal, but don't realize that the unit price is not better for many items, and often in deceptive ways.

That type of 'dollar store' is basically defunct (edit: must be a local phenomenon) Family Dollar and Dollar General are essentially small Wal-Marts and sell products for approximately the same price.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#33

Post by mumblemumble » Mon, Aug 02, 2021, 5:34 PM UTC

mc32 wrote: post #10

It looks like a couple of things going on: 1. We have more people without much disposable income (which is composed of two populations: poor immigrants with few marketable skills, and two, poor Americans left behind due to shipping MFG overseas --going on for a while, jump-started by MFN status in the 90s). 2. People want cheap stuff. It's unfortunate. It means more disposable crap going into the landfill. Save up an…

To your #3 - in my (US) city there have always been those cheap goods stores. There was one in the (2000 person) town I grew up in, too. The big change I'm seeing is that the independent, mom-and-pop ones are being displaced by major chains.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#34

Post by MattGaiser » Mon, Aug 02, 2021, 5:34 PM UTC

jcims wrote: post #16

It's not clear to me what the problem is that the article is outlining. The Dollar General near me has the exact same brands as you would find in any larger retail establishment, they just have found a way to stock the 80% that folks typically need. They are filling a niche between the gas station convenience store and traditional grocery/big box retail. They don't have a produce section, just a bit of fruit. Is that…

The problem as I understand it is that products aren’t priced in a grocery store to all have the same margin.

So the prepared foods and toiletries get marked up to make up for low margins on fresh fruit. Wealthier customers are fine with this as they want to not have to make two trips and they will pay for the fruit.

Dollar stores ditch the fresh stuff and just take a lower margin on the toiletries and prepared food to make up for it, resulting in lower prices. A bit of extra savings matters more to poor people, so they shift those purchases to the dollar store. The grocery store’s business model fails.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#35

Post by mc32 » Mon, Aug 02, 2021, 5:34 PM UTC

RcouF1uZ4gsC wrote: post #25

mc32 wrote: post #10

It looks like a couple of things going on: 1. We have more people without much disposable income (which is composed of two populations: poor immigrants with few marketable skills, and two, poor Americans left behind due to shipping MFG overseas --going on for a while, jump-started by MFN status in the 90s). 2. People want cheap stuff. It's unfortunate. It means more disposable crap going into the landfill. Save up an…

> Save up and buy something that will last. Unfortunately, just because somethings costs more doesn’t mean it will last more. Maybe in the past there were brands that prides themselves on durability, but now most of the stuff seems not to really consider durability and longevity, and the financially smart move might just be to buy the cheapest thing that works and plan on replacing it when it breaks.

There is something to that. But consider household tools like Craftsman (had lifetime warranty). Now Craftsman is cheaply made with poor metallurgy and has a limited warranty. People will buy that at the HomeDepot. Sure, you can buy more reliable brands, but most people like you say won't know which ones to buy since many have been shipped overseas.

Furniture is now disposable. Clothing is disposable (even if you didn't mind fashion, it will end tattered after a couple of seasons. You can still buy excellent clothing, it just costs 5x.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#36

Post by NortySpock » Mon, Aug 02, 2021, 5:34 PM UTC

cm2187 wrote: post #15

Stupid question from someone who doesn’t live in the US. Do they actually only sell sub-$1 products? It seems they have been operating for 30y. Inflation must severely restrict the range of products you can offer over such a long time.

In addition to the replies you already got, there is a new store around here (I'm in the Midwest) called Five Below (with cold weather theming), which uses the "dollar store model" but for $5 USD or so.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#37

Post by jcims » Mon, Aug 02, 2021, 5:34 PM UTC

ybean wrote: post #13

seibelj wrote: post #7

The gut-reaction is that this is some horrible thing rather than a scalable business model that provides low-cost goods to customers in rural areas that were previously underserved. My family in rural Oklahoma and Texas have to drive over an hour to Wal Mart, the dollar stores have a similar but curated subset of goods at a cheap price, and the distance is much closer. HN monoculture loves to crap all over things lik…

Your example is already biased, because you use Walmart as the other option. Walmart already came through and blew away the local mom and pop market in these rural areas. Are they more convenient than driving an hour to a walmart? probably. I've seen small family run stores go out of business specifically because they can't compete with a dollar general that opened a mile away. "Deeply beneficial" seems like a strong…

Dollar General is wildly successful because they are filling a need.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#38

Post by dwater » Mon, Aug 02, 2021, 5:36 PM UTC

cm2187 wrote: post #15

Stupid question from someone who doesn’t live in the US. Do they actually only sell sub-$1 products? It seems they have been operating for 30y. Inflation must severely restrict the range of products you can offer over such a long time.

30 years ago, maybe 90% of the products in most dollar stores were exactly $1. The rest were usually $2, $3, maybe $5, and were clearly marked so that the default was if it wasn't marked, it was $1. That is no longer the case, now they usually operate like regular stores with prices on all the items, and they are no longer trying to price items at exactly $1.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#39

Post by pasttense01 » Mon, Aug 02, 2021, 5:36 PM UTC

zwieback wrote: post #12

I've tried to find out the source numbers but can't find them. One article says a third, another "nearly half of large chain retail stores". It's unclear what the denominator is but I highly doubt it's "all new stores" as the linked article claims.

Exactly. They only look at chains--not the massive number of single stores.

Re: Dollar stores make up nearly half of all new store openings in the U.S.

#40

Post by safog » Mon, Aug 02, 2021, 5:36 PM UTC

jcims wrote: post #16

It's not clear to me what the problem is that the article is outlining. The Dollar General near me has the exact same brands as you would find in any larger retail establishment, they just have found a way to stock the 80% that folks typically need. They are filling a niche between the gas station convenience store and traditional grocery/big box retail. They don't have a produce section, just a bit of fruit. Is that…

After a couple of levels of indirection, I think the whole argument hinges on one anecdote. It might indicate a general pattern, but no actual authoritative sources back it up.

Original Article quotes

"growing evidence suggests these stores are not merely a byproduct of economic distress. They’re a cause of it. In small towns and urban neighborhoods alike, dollar stores are triggering the closure of grocery stores, eliminating jobs, and further eroding the prospects of the vulnerable communities they target"

This links to a report here as a source: https://ilsr.org/dollar-stores-factsheet/

Which cites https://www.theguardian.com/business/2018/aug/13/dollar-gene... as its only source.

The actual quote:

"“We lasted three years and three days after Dollar General opened,” he said. “Sales dropped and just kept dropping. We averaged 225 customers a day before and immediately dropped to about 175. A year ago we were down to 125 a day. Basically we lost 35 to 40% of our sales. I lost a thousand dollars a day in sales in three years.”"