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Dollar-stores overcharge customers while promising low prices

theguardian.com

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Re: Dollar-stores overcharge customers while promising low prices

#461

Post by thephyber »

JKCalhoun wrote: post #441
regera wrote: post #116

Dollar stores are private equity with a checkout lane. In 2025, Dollar Tree sold Family Dollar to a group of private-equity firms: Brigade Capital Management, Macellum Capital Management and Arkhouse Management Co. https://corporate.dollartree.com/news-media/press-releases/d... It’s a business model cosplaying as poverty relief while quietly siphoning money from the people least able to lose it. They already run on a…

Here's how shitty of a business person I am: I had no idea that the poor were a "market" you could prey upon. Somehow I thought that if I presented a business plan that began, "Our target audience are those living paycheck to paycheck…" that I would be quickly shown the door.

Dollar Tree and Dollar General are sometimes located in the poor part of a city, but most of their locations are in areas which are too poor to sustain good margin businesses. Rural towns with a single road and only 1-2 gas stations, etc. their core business is to offer smaller and smaller portions to maintain profits while rival stores go under. They are so prolific, they can get giant companies (think drinks, household items, and pharma) to create smaller and smaller portioned SKUs over time.

The businesses were originally just exploiting a gap in the market, but then PE realized that they could just buy out these local monopolies.

Re: Dollar-stores overcharge customers while promising low prices

#462

Post by burkaman »

jefftk wrote: post #372

> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50. This very rarely happens in MA, because when it does the store has to give you the item for $10 off, including if that makes it free. And they have to post a sign at the register explaining the law, which means when you're invoking it all you need to do is point at the sign. https://www.…

Is this a recent law? I lived most of my life in MA and I've never heard of this, and never noticed one of those signs.

Re: Dollar-stores overcharge customers while promising low prices

#463

Post by garbagewoman »

qeternity wrote: post #408
garbagewoman wrote: post #402

Earlier quoted context omitted.

Did you ever consider that they might have caused this situation?

It would help people to consider your point if you made even a modest attempt to explain and justify what you mean.

My point is not to explain how they caused it, its to point out that the commenter didn’t even mention the existence of that possibility

Re: Dollar-stores overcharge customers while promising low prices

#464

Post by youarentrightjr »

gruez wrote: post #275
youarentrightjr wrote: post #251

Earlier quoted context omitted.

I see these private equity takes on HN frequently and am really baffled by the ignorance. There's a very clear difference between a public and private company - the fiduciary duty to shareholders. There is a legal requirement for directors of public companies to act in the financial interests of all shareholders. In practice, and according to precedent, this means long term viability of the company, in other words, a…

>There is a legal requirement for directors of public companies to act in the financial interests of all shareholders. In practice, and according to precedent, this means long term viability of the company, in other words, a sustained profitable business. All that means is that controlling shareholders can't use the company as a piggy bank and raid it to fund their other ventures. It doesn't mean the business has to…

> All that means is that controlling shareholders can't use the company as a piggy bank and raid it to fund their other ventures

Yes, you're getting it now.

> It doesn't mean the business has to be "sustainable" or whatever. In fact, it's perfectly legal for the board to sell to a "vulture" PE firm that will sell the business off for parts, as long as the sale price is good enough.

As discussed elsewhere in this thread - the sale itself is required to maximally benefit the shareholders.

Re: Dollar-stores overcharge customers while promising low prices

#465

Post by rtp4me »

greycol wrote: post #460
rtp4me wrote: post #437

Earlier quoted context omitted.

You want prison sentences for execs if you were charged $1.50 for a can of corn instead of $1.45? Surely you can't be serious.

If you really believe 5 cent transactions never amount to significant consequences why don't you send me 5 cents a million times.

OK, and the next time you defraud your employer by $0.05 (take a longer break then needed, arrive late to work, etc) then you should spend the rest of your days in prison. Fair is fair, right?

Re: Dollar-stores overcharge customers while promising low prices

#466

Post by seizethecheese »

skippyboxedhero wrote: post #262
devilbunny wrote: post #229

Earlier quoted context omitted.

It’s a bit like payday loans; they are a bad financial deal, but the alternative is no credit at all because the people who get them are high-risk borrowers and the costs associated with making and servicing a loan aren’t radically different for $500 or $50k. Being poor is tough. But the low margins are a pretty good indicator that the alternative to shady businesses is simply not having businesses at all.

There is a difference. ROI on payday loans for lenders is typically very high and their main issue is usually regulation that limits the volume they can transact. ROI on dollar stores is very low because the margin is low, costs are high, and inventory turns is relatively low. For example, Dollar General's inventory turns are half Walmart, that means that to continue operating they need to charge higher prices (the m…

> Low margins aren't an indicator of anything. They are a component of financial return in addition to capital. One does not make sense without the other. In high frequency trading, they are making 1/100000th of a percent on a trade, that is a very high return business if you can do this millions of times a day. Similarly, if I run a housebuilder then I need a 20% margin because I am going to be turning over my inventory across multiple years.

This is wrong because quarterly reporting normalizes for expenses in same period

Re: Dollar-stores overcharge customers while promising low prices

#467

Post by adolph »

sema4hacker wrote: post #122
regera wrote: post #116

Dollar stores are private equity with a checkout lane. In 2025, Dollar Tree sold Family Dollar to a group of private-equity firms: Brigade Capital Management, Macellum Capital Management and Arkhouse Management Co. https://corporate.dollartree.com/news-media/press-releases/d... It’s a business model cosplaying as poverty relief while quietly siphoning money from the people least able to lose it. They already run on a…

Has private equity ever done anything good for anyone outside of the investors?

> Has private equity ever done anything good for anyone outside of the investors?

This is a bit like asking if public equity has ever done anything good for anyone outside of its investors. It really depends on what is meant by "anything good."

Has any company that has taken venture capital (a variety of private equity) ever done anything good for anyone outside the VCs?

Private equity is more often associated with late stage takeovers and reorganizations than with startups, however. An example might be the privatization and refocus of Dell. Was a refreshed Dell good for its workforce and customers?

https://www.wallstreetoasis.com/forum/private-equity/the-lea...

Re: Dollar-stores overcharge customers while promising low prices

#468

Post by rtp4me »

hedora wrote: post #457
rtp4me wrote: post #437

Earlier quoted context omitted.

You want prison sentences for execs if you were charged $1.50 for a can of corn instead of $1.45? Surely you can't be serious.

If there’s a paper trail showing they authorized it, and the total amount of fraud is enough for felony charges (a few thousand bucks, I think), then yeah, throw their asses in prison, and make them refund the money they had the business steal out of their personal funds. I’m all for limited liability corporations, but if there is a smoking gun that shows you intentionally engaged in criminal activity, that should pi…

Do you honestly believe a senior exec at a company specifically said to charge the customer more than what the price on the shelf says? Chances are, in the world of computers and automation, mis-pricing just happens. Its a chance we all take as consumers. You just have to be mindful when shopping.

Re: Dollar-stores overcharge customers while promising low prices

#469

Post by [deleted] »

DangitBobby wrote: post #434
phil21 wrote: post #423

Earlier quoted context omitted.

Explain why rural customers prefer the dollar store to the grocery store? Are they just stupid and don't know what's best for themselves? Perhaps the rural grocers are not carrying the appropriate product mix for their current (new?) customer base, and are overvaluing customer service? I don't like it - but I also spend time in rural communities and see why these places beat the local grocers. They offer better value…

They do not offer better "value on the dollar" they offer units that individually cost less but over a year of buying what you need to survive you pay more. That's how items are generally priced; smaller packages, higher unit price (as in, price per ounce). You shouldn't say "screeching" if you want to be taken seriously, it makes you sound shallow and dismissive, incapable of understanding how your narrow outlook is…

[deleted]

Re: Dollar-stores overcharge customers while promising low prices

#470

Post by calvinmorrison »

jancsika wrote: post #28
jrmg wrote: post #19

Earlier quoted context omitted.

I don’t think this is true. Even if pricing in the shelves is accurate, in my experience Dollar General is typically a little more expensive than a normal mid-range supermarket (or e.g. Amazon) for most things.

Could work like this: 1. You help your friend wash the dishes and notice their hefty, 5-quart stainless steel pot. You look it up on Amazon and it's like $50. 2. At $store, you see something that looks like that size and style of pot, but for only $10. What a steal! It's even ultralight so it should be easier to load in the dishwasher... * Several months later* 3. Your pot is all warped to hell, making it difficult t…

That's what I think people don't really get about being poor. They _know_ they are cash strapped. and like a cash strapped business, managing cash flow is more important than log term investments.

They _know_ buying a small bottle of dish detergent is more expensive per oz, but buying in bulk would require a 15-16 week lead across all their purchase categories.

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