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

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

#51

Post by mumblemumble »

gameswithgo wrote: post #30
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…

When dollar stores replace grocery stores in a community it reduces the quality of nutrition available. Potential vicious cycle there. Economic downturn --> worse nutrition -> decline in mental and physical health of community -> more downturn

There's a part of me that wants to push back against this idea that fresh produce is synonymous with good nutrition.

Frozen produce - which the dollar stores in my area do carry - tends to be more nutritious nowadays. It is also much easier to prepare, and, assuming you have access to a freezer, is less susceptible to spoilage.

And if your food preparation options don't amount to much more than a microwave oven, or you simply don't have the time to do a lot of cooking, the frozen dinners that these types of stores sell might be one of the healthiest meal options you have.

Which isn't to say that food deserts are necessarily a good thing. I used to live in one and it was awful. But I do want to at least consider the possibility that the reason that these stores get a lot of business is that they are better serving the actual needs of their clientele. If that's the case, then perhaps the way forward is not to try and force everyone back to the old stores they probably did have a reason to not be shopping at anymore, so much as to try and figure out new things that suit their needs even better.

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

#52

Post by ergot_vacation »

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.

This has been mentioned elsewhere in the thread, but to clarify: the business model used to be "everything (almost) is a dollar." Now it has shifted to "Everything is a (seemingly) low price, and all prices are rounded off."

The strategy is predatory: You take a product like name-brand dish soap, divide it up into smaller containers (but not small enough to be obvious!) and presto, your soap is "cheaper" per unit, when in reality, you're charging more per oz. Then you make it as convenient as possible: more locations that Starbucks, nice rounded off prices so customers don't have to do math, and so on. The bottom line is that you end up profiting by over-charging poor people who either don't realize what's happening or have no other viable options.

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

#53

Post by Joeri »

seibelj wrote: post #24
ybean wrote: post #13

Earlier quoted context omitted.

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…

For anyone reading this thread who still has an open mind, I recommend this 2009 episode of the EconTalk podcast that talks about actually working at Walmart and how supposedly-great the "mom and pops" were before Walmart took over: https://www.econtalk.org/platt-on-working-at-wal-mart/ The truth about the mom and pops is that they had very limited selection, high prices, long delivery times, and often were owned by…

That's just a set of anecdotes though. Maybe mom and pop stores came in all kinds of varieties, some were better and some were worse. Maybe we shouldn't automatically praise them but maybe we shouldn't also automatically assume that because some of them weren't good most of them weren't good. I doubt anyone has the data to advance a definitive view of mom and pop vs walmart.

What I do think we can say definitively is that any market that has few competitors over time will atrophy. Having the store landscape reduced to a few big chains with little variety is not healthy for that market.

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

#54

Post by lotsofpulp »

mnd999 wrote: post #46
MattGaiser wrote: post #2

Retail makes so little sense now for anything that isn’t very cheap. Otherwise you can just ship it from Amazon, Instacart, or a speciality store.

The natural conclusion of this is no retail at all, no malls and high streets reduced to cafes, hair salons and betting shops (where that’s legal). All retail goes through 2 or 3 big online suppliers with cavernous warehouses that deliver daily in vans or at a premium within the hours via bike or drone. This sounds more dystopian than utopian to me.

AKA efficiency.

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

#55

Post by MattGaiser »

mmiyer wrote: post #6
MattGaiser wrote: post #2

Retail makes so little sense now for anything that isn’t very cheap. Otherwise you can just ship it from Amazon, Instacart, or a speciality store.

Instacart ships from retail though.

While proving the model, yes, but there is no inherent reason it needs to long term.

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

#56

Post by freemint »

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…

> They don't have a produce section, just a bit of fruit. Is that the issue?

Yes, it is as produce is a group of products that a better margin than produce (and produce spoils easier). By comming into an market and serving produce any other store is put at an disadvantage if they sell produce. This leads to "food deserts", places where you can not find healthy, affordable food.

> Are the small independent grocery stores in these communities stocking produce?

If there are any, they are worried. If you have 7 minutes this video by VICE from 2018 explains some of the concerns. https://www.youtube.com/watch?v=N6IqsG-Iiik There are also community actions against dollar stores such as here https://www.youtube.com/watch?v=-vLWTkBQWP0 This CBS reports about grocers being closed due dollar stores moving into towns https://www.youtube.com/watch?v=GtAvJBAJfnE drawing parallels to Walmart killing mainstreets

> Is Dollar General and the like creating some kind of price cartel that's putting them out of business?

By serving only non produce goods a competing store which previously was able to carry produce and was able to bear this expense due non-produce sales will see reduced non-produce sales leading to worse financial performance and possibly clousure or a slow death while loosing customer to dollar general.

> previously only had a gas station convenience store and people had to drive 12 miles

This is an improvement for those people, good.

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

#57

Post by robotresearcher »

paulpauper wrote: post #17
helsinkiandrew wrote: post #4

Good article and discussion about the economics of these "Leeches of the poor": https://news.ycombinator.com/item?id=27650477 TLDR: The products in Dollar Stores aren't 'cheap' in the sense that they cost less than other stores per unit - its just that they're (mostly) packaged into smaller units that people living paycheck to paycheck can afford.

It's a bad deal, marketed to ppl who either cannot do math or afford larger quantities

Do you buy your toilet paper by the palette direct from the manufacturer?

Everybody trades off the unit size, handling costs and cash flow when buying goods.

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

#58

Post by axaxs »

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…

They are often criminally understaffed, and get away with lower prices as a result. Added to that their shear size, they are able to purchase in bulk cheaper. Which shuts down locally run things, because they can't compete without breaking the law in turn with somehow more abhorrent labor practices.

There was recently a video about a lady who worked at Dollar Tree for just a short time before quitting. I posted a link below, but it's kinda long so I'll summarize. She basically wasn't allowed to take breaks, and had to find her manager to ask permission to get a drink of water. In Florida heat. It was pretty heartbreaking.

https://youtu.be/Jkfjlo3VFcs

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

#59

Post by sokoloff »

safog wrote: post #40
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, e…

Dollar General comes in and offers local consumers a bargain that local consumers strongly prefer. Accordingly, local consumers vote with their feet.

Unless the master plan is to run competitors out of town and then change to "Two Dollar General", it seems like Dollar General is good for consumers (at least if you judge by consumers' own revealed preferences).

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

#60

Post by [deleted] »

mumblemumble wrote: post #51
gameswithgo wrote: post #30

Earlier quoted context omitted.

When dollar stores replace grocery stores in a community it reduces the quality of nutrition available. Potential vicious cycle there. Economic downturn --> worse nutrition -> decline in mental and physical health of community -> more downturn

There's a part of me that wants to push back against this idea that fresh produce is synonymous with good nutrition. Frozen produce - which the dollar stores in my area do carry - tends to be more nutritious nowadays. It is also much easier to prepare, and, assuming you have access to a freezer, is less susceptible to spoilage. And if your food preparation options don't amount to much more than a microwave oven, or y…

[deleted]
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