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 issue?
Are the small independent grocery stores in these communities stocking produce? Is Dollar General and the like creating some kind of price cartel that's putting them out of business? I know of two Dollar Generals near me, one in a small one-light town that previously only had a gas station convenience store and people had to drive 12 miles to get anything besides milk, condoms and beef jerky. The other on the outskirts of a small town that still has a thriving small grocery store in the middle of it.
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"
"“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.”"
There is a presumption here that "local" grocery stores are an unalloyed good. In my experience, having grown up in these kinds of places, they were often more exploitive and extractive than the national chains. When Walmart rolls into town, many times it breaks a local monopoly that used this fact to its advantage with both customers and employees.
A problem in the US is that there are many thousands of communities that are below the size/density threshold where the traditional Walmart model makes sense. Dollar General seems to be well-optimized to fill this part of the market.
Another nice thing about national chains is that they mostly stay out of community politics. Local monopoly business owners have a bad tendency to leverage that status into completely unrelated political and personal matters.
Poor people don't eat much fresh produce unless they grow it themselves. Frozen vegetables are preferred because they are cheaper and often higher quality because they weren't sitting around for days and weeks. I grew up quite poor in a few different regions of the US, it works like this everywhere. In more rural areas, there are a lot personal gardens and barter. You aren't going to convince a poor person to spend more money on a worse product. Insisting that grocers in poor areas carry large stocks of fresh produce isn't helpful, it just demonstrates a naive lack of familiarity with how poor people optimize their food spending. They have plenty of access to quality vegetables.
I know a wealthy person with impeccable culinary taste whose guilty pleasure is eating certain frozen/canned vegetables. She grew up very poor and loves the taste/texture of them even though she can easily afford the most bougie fresh vegetables available. It isn't nearly as bad to get your produce this way as I think some upper-middle class people assume it is.
I don't mean to offend the honor of frozen vegetables, which often are fresher even in the fancy grocery store, are equally nutritious (maybe less true of canned ones), and are perfectly suitable for many uses. Nor do I mean to pretend to have some kind of deep understanding of how the other half lives. My point is just that if the grocer had nutritious options and the dollar store just sells garbage then there are some negatives to the latter replacing the former for people's health.
Back in the day we used to have a butcher, a baker, maybe a local fisherman, and fresh eggs & vegetables in a farmer's market. All of that was supplanted by supermarkets & grocery stores. With those options gone, an array of services will be unavailable to poor people, and they'll grow up on canned food and candy. That leads to poor decisions about food, which leads to poor health, which leads to all sorts of problems. And then of course there's the death of human culture. It's not uncommon today for poor households to not even know how to boil rice. It's not all the Dollar Store's fault, but at some point we do need to push back on the slow decline of our civilization.
That is a rather extreme and inaccurate caricature of the food situation for poor people. You can choose to believe it but it doesn't make it true. Sure, there are some poor people that nothing but junk food but that doesn't reflect on the food that is typically available to them.
Yep. I've lived in many large cities with huge food deserts where the only access to food within a 1hr bus ride were liquor stores, fried chicken, and gas stations (not even a 7-11).
I knew some kids growing up whose parents did not know how (and did not want to learn) to cook even the essentials. If it couldn't be microwaved, warmed up in an oven, eaten cold, or bought from McDonalds, they didn't eat it.
The grocery business is extremely low margin. The independent grocer is increasingly being squeezed. There really is no way for an independent operator in this space to compete head-to-head on price or selection. If the local market allows they can go niche, or high-end and increase prices further while offering better product/ better customer experience, but most markets won’t support such a store.
Based on your spelling of “generalisation” I take it you are from the UK. I am speaking of my knowledge of the US grocery business. There may be differences. I fully admit to having essentially zero knowledge of the grocery business landscape in Europe.
Independent grocers certainly do exist here, but it is increasingly rare and, in my experience, it is almost always a long running business that, yes, is trying very hard and have either a market that is too small for a chain to move into or, as I said in my previous comment, a specific niche. Typically this niche is the very high end or a specific ethnic cuisine such as Korean, Mexican, or Italian where you can find ingredients and brands you just can’t find in a chain store. Though these stores are typically very small and are closer to general stores in some cases. A good deli or grill is another good differentiator for some grocers. I have yet to see a fully independent one store grocer compete head to head with a chain grocery store. I just don’t think the economies of scale are there to allow it. There are smaller regional chains that are able to compete with the national grocers, but they get bought up eventually by chains to eliminate competition in a region.
This is the same argument about local newspapers - sure it is probably good to have local reporters covering local events, but replacing $5/line classified ads with Facebook Marketplace probably had a more positive impact on people vs. biased and poorly-read write-ups of a city counsel meetings ever did.
>We assess the impact of newspaper closures on polarized voting, using genetic matching to compare counties that are statistically similar but for the loss of a local newspaper. We identify a small but significant causal decrease in split-ticket voting in presidential and senatorial elections in these matched communities: in areas where a newspaper closed, split-ticket voting decreased by 1.9%.
A 1.9% decrease as a result in a social science experiment does not exactly feel like a lot to me. The paper is paywalled, but I'd love to see their community matching methods and confidence intervals.
EDIT:
Found it [0]
The paper tests how 66 communities (defined as only the county that the newspaper is headquartered in) with closed newspapers voted in 2012. The experiment tests for how many people split their vote only among President and Senator. Those communities skew very white (76% vs. 60% US average) and way over-represented the US East Coast + Midwest.
Even taking all of that for granted, when they ran a placebo test on the 2008 election, they found literally the same difference (1.9%), just with a higher standard deviation (so they could call the result not significant).
I don't think Facebook is good for news at all (we probably agree that it is by design polarizing), but local papers are not the salvation many make them out to be.
Amusing. My personal experience is that DG is awesome. Before DG in the town I'm familiar with if you wanted to buy basic office or school supplies, basic OTC medical supplies that were not a gas-station 2-pack of aspirin, essentially any cookware, or a better variety of packaged goods than the local mediocre grocery store (like detergent, snacks, juice, sauces) you had to drive over 20 miles. The produce that DG does have is fresher than the local store and they also don't try to resell expired meat. Now people can use way less gasoline for their basic needs. Now senior citizens with limited mobility can drive slowly or take a golf cart to DG. Rather than "eroding prospects" it adds to sales tax revenue and makes the town more attractive for tourists, remote workers, and other people who are relocating. Dollar stores also have a small land footprint and use few utilities.
If there are two underrepresented groups in HN comments its poor folks and people that live in rural communities. This article is just scapegoating 'dollar stores' for scenarios where their growth intersects with environments suffering from incompetent leadership and shitty education as if a) it's the only place these stores exist and b) they are the root cause for the problems being outlined.
Yeah, as someone who grew up (and still is) lower middle class near rural areas, DGs and the like served a niche that would be hard-press to be filled by other companies, national or local.
So I can't really blame a company for taking over a market underserved. They are a symptom of larger changes in the economy and society, that which one SHOULD criticize.
Yeah, I don’t think this is the dollar store chain’s fault. They are serving a niche. The problem is that this is such a growing niche, that well, it isn’t really a niche anymore.
The problem is poor and low to middle income folks everywhere in America seem to be getting poorer.
There are regular excellent comments and discussions here on homelessness and poverty prompted by @DoreenMichele.
A notable outlier here, and one I suggest checking out.
Yup, most of the comments here are by people who wouldn’t be caught dead shopping at dollar store since it’s “for poor people” yet they are happy to extol the ills of such a business and demand it go away to protect “poor people”.
I no longer live in the rural area where I grew up, but near enough that I've been out there periodically.
The Dollar General was a real game changer. Prior to its arrival, you had a 25+ minute/mile (your pick - mostly 55 mph speed limit country roads) drive to the nearest thing passing as a grocery store. When I was a kid there was a gas station, which did sell some food (maybe bread and milk and some canned goods, along with the typical junk food).
DG is such a real improvement for people out that way. It sells the stuff they need at prices that aren't ridiculous.
Crucially, it doesn't displace or undercut anything. There wasn't any other store to displace - even that old gas station is still there! Dollar General is effectively an oasis in a food desert, even with its lack of fresh produce.
I don't know what percentage of Dollar General / Family Dollar / etc type stores are in areas like that, versus in small towns where they might be competing with an IGA or something. But there are definitely places where their presence is a real win.
Does Amazon refuse to deliver to homes in the town you're familiar with? Doesn't help with produce since not everywhere has same-day Amazon Fresh I guess (and Amazon's isn't very good compared to store alternatives in the Bellevue, WA area), but it hasn't occurred to me to buy basic office/school supplies, OTC medical stuff, or many other things from a store instead of Amazon for a long time.
Amazon tends towards larger quantities, which is what people have trouble affording. I am happy to buy in bulk for things that I use -- as an example I take Zyrtec every day, and buy a 365-count container every year for $15. Dollar stores aren't competing with that, they're for people that can only afford $1 right now, and so they end up with a 14 count container for that. Those people will pay $26 for a year supply, but the important part is that they have $14 right now and are still free of allergies.
That is the problem that people have with dollar stores. They have a cheaper cost of entry, but are more expensive overall. Those of us that aren't living paycheck to paycheck have the liberty of buying things a year in advance to get a better price, and Amazon is great for us. But most of the country isn't doing quite so well.
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).
It's not really great for them when they leave the store and go back to being citizens of their communities. The dollars they just spent aren't being reinvested by the local owner, they're going to a private equity firm based in New York. That's pretty clearly extractive, rather than being a mutually beneficial relationship.
And that private equity firm is largely made up of capital from pension funds, charitable endowments, and university endowments.
Dollars leaving the community is a good thing. Those dollars don’t just go into a black hole. They go to other towns. And some of those towns’ dollars come to our town.
That allows all of us to diversity our risk across geographic areas. I’d much rather own a small slice of grocery stores in 1000 towns across the country than a large share of the grocery store down the street.
> Dollars leaving the community is a good thing. Those dollars don’t just go into a black hole. They go to other towns. And some of those towns’ dollars come to our town.
Trickle-down economics failed the U.S. before and will fail us again. Trickle-down economics are a lie sold by the mega-rich.
And I'm sure those same dollar store shoppers collectively held approximately 0% of the equity in the locally owned business that was displaced.
But as price-sensitive consumers they do benefit from the substantially higher economies of scale, the productivity efficiencies of management best practices, and the lower cost of capital that comes with a professionally managed multinational corporation.
What is good for consumers may not be good for communities though. I'd argue that there is significant harm perpetuated on economies by the migration of wealth away from wages and small-scale profits of local businesspeople into the profits of large companies.
That's a common refrain for "buy local", but is that always true? It seems to depend on many assumptions...
1) That the local business owner will invest back into the community, more than the chain store would have. Sure, some of that revenue will go towards employees, local sales tax, charitable donations, etc., but the same could be said of the chain store. The rest of the profit... what's to stop the local owner from accumulating savings in a national bank, or investing in out of area stocks, crypto, etc.? Unless they were thinking of expanding/franchising their store, their actual investments (as opposed to costs) may or may not be in the local economy vs whatever has the highest ROI.
2) That the local consumers who saved money from the chain store wouldn't simply spend that money at other local businesses. Let's say the chain store saves 1000 customers $10 each, that's $10k of unspent money that could be organically used at other businesses, vs that $10k being funneled into the control of a single small-business owner who might just invest it elsewhere. On average, there's probably a higher chance of 1000 customers spending at least SOME of that money locally than that one local business owner deciding to.
3) Small local businesses typically do not have the economies of scale that benefit pricing and processes, which means they don't have the same margins, which means they might not be able to afford good wages & benefits for their staff, or have to pass on those costs in the form of higher prices for local consumers (who then have less money to spend on other businesses).
4) Most market goods are fungible and UPCed and distributed across the whole country anyway, whereas things like schools and real estate are strictly local/geographical. Money consumers save can be spent on their own immediate family needs, building community by allowing them to afford actual roots instead of just shopping local and supporting that one small business owner.
5) Small businesses tend not to have a very diverse labor force (in terms of skill sets), especially if they're retail. That means the local labor pool has limited employment options beyond low-end service jobs. Especially in a post-COVID employment landscape, large digital-savvy companies probably offer a more realistic pathway out of rural poverty (i.e. people can learn skills, work for remotely for one, but stay local). The small local mom-and-pops can only very rarely offer that to local residents... maybe they contract a local print shop or two, but rarely do they employ full-time marketers, designers, artists, coders, architects, sustainability people, etc.
Basically the whole "buy local" argument seems to stem from the idea that your money is better in the hands of a small business owner than Jeff Bezos's pockets. Maybe that's true in some statistical sense, but it also misses the savings that YOU keep and can spend how you see fit, including investing in your community in actual, non-trivial ways (employment, real estate, schools, local government, marriage, etc.). Buy local might be good for local business owners, but I don't think it's necessarily good for local consumers or local communities. I'd be happy to see data showing otherwise though...
Here is a wild guess: a new kind of store sells only the top, say, 50% of items in terms of sales numbers, and sells them for a little less. People out shopping for things all from that group go there. But everybody needs the bottom 50% sometimes, and when they do, that store is no longer around.
This was a better argument before the internet. Nowadays I don't think it's worth paying a 30% markup on everything so that one thing you sometimes want is always within driving distance.
At the end of the day people shop where it's convenient and cheap, with a bit of a tradeoff between those too. Some people like spending more at a locally owned place, but most would rather pocket that extra cash.
Dollar general does frequently have a high markup in poor communities without alternatives. It’s for lack of a better term poverty optimized which counterintuitively isn’t about the lowest cost per pound of flour etc.
The shrinkage rate may also contribute to this. In other words, the more goods that are stolen from the shelves, the higher the prices have to be on everything else in order to maintain sustainability.
In this way, shoplifting is essentially a tax on everyone else in your community.
If Dollar General is not in that neighborhood that has limited choice (or DG closes down/pulls out), is that community made better or worse? I think it's made worse.
Well if the choice is nothing or DG, of course everyone is going to pick DG. And you're right that's the choice many communities are facing. But it wouldn't take much tweaking at a policy level (civic, state, federal) to change that equation and bring business that actually support the community (jobs, high-nutrition and more local products, a venue for community building events, etc). The fact that the choice is DG or nothing is the problem, not DG itself.
What policy changes would "fix" the problem you're portraying? I see nothing simple, and definitely nothing that would just be a tweak to existing policies.
Well, i’m not in the local grocery business, but some avenues i would explore are:
tariffs on importing mostly single use soon-to-be-trash from china - something that would cut into their business model in a big way. Decent antitrust to prevent some of the monopolistic practices that mean DG and Walmart can get better deals from distributors. Requiring a livable wage for the one or two cashiers might be enough, honestly. I’m sure there are plenty of others i’m unaware of. The systems we have are what enable this business to exist, and make it hard for healthier (both in terms of food sold and their impact on communities) business to exist.
In my neighborhood at least, the closure of the only affordable grocery store led to a number of people selling produce on the street corner out of the back of pickup trucks. This is in the middle of a major city the US northeast.
This is indeed the master plan; DG will flood an area with conveniently located stores, drive out the bodegas and grocery stores, then close DG stores to reduce redundancy (and leave the existing stores to rot). The result are food deserts that encompass inner city neighborhoods where the only thing you can find to eat is hyper-processed and comes from a box.
Dollar General is at the crossroads of a bodega and a grocery store: it’s way better than the bodegas despite not being much more expensive, but it also replaces enough grocery store trips that grocery stores are no longer economically viable.
My father-inlay lives in a small town of roughly 2k. The local grocery store continually goes out of business since it can't compete with the Walmart and national grocery store that's roughly 15 miles away. In the winter time, that's can be a pain to drive.
So he's had to rely upon the two local gas stations, and their meager and overpriced groceries much of the time. DG opened up last year in town, and now he has a much better place to shop. The store also pays better than the gas stations. I think it's a win win.
And can you point to where I can read about DG's "master plan?"
> the only thing you can find to eat is hyper-processed and comes from a box.
Maybe my area's DGs are atypical, but their selection of food that doesn't fit this description is barely better than a decent gas station's. If your only option is a DG then you may already be in that situation, without their needing to close the store to make it happen.
It seems like, if this sort of thing is actually happening, then, when we strip away all the specifics, which seem to be a bit emotionally charged, we're left with a clean little fable about capitalism?
"A long time ago, there was one store, and prices were high. Then a second store came to town, and prices were low. Eventually, one of the stores closed, so now we have one store again, and prices are high."
I think it's the last step that's not happening here. DG comes in, outcompetes the less efficient alternatives, and then stays DG for the long-run. IMO, making the consumers in the community better off.
Perhaps, though there is that thing about local business keeping the money local to contend with.
At the same time, I'm not convinced we can just assume that to be the case. When a new grocery store in the neighboring town came and put the IGA out of business, my friends were also comparing notes and noticing that the new store paid better than the old one. And offered some things locally where we previously had to drive all the way into the city to get them.
I'm just not convinced these kind of situations can all be neatly fit into a single, straightforward narrative.
>Perhaps, though there is that thing about local business keeping the money local to contend with.
I'd say this is to be proven. People that own businesses in broke areas (which is what we're talking about here, no?) are also likely to invest their money in expanding their company in other broke areas, personal financial investments and their children's education.
I live in a relatively rural community where the public schools actually do quite academically when compared across the entire state and we would get families moving into the community because of the excellent care we provide to developmentally disabled kids. Unfortunately the vast majority of people I know that went to college moved out of town and is now generating tax revenue elsewhere.
> They’re manipulating that “new purchase” high similar to Facebook juicing us via likes.
Very aptly put. I've been captive to their charm and can verify there is a certain dopamine thrill that quickly vanishes after the subpar goods are brought home and inspected.
These phantom brand dumps invariably smell of cheap plastic dust. That tragic scent fits the gloomy foreboding that such places bring, and should also ward off would-be entrants. It is a literal air of hopelessness. I miss real shops and solid kit.
This is absolutely true but if you pay attention you can save money. Make a cheap lunch for work, gift bag for a birthday, quick emergency repair but just as much you see people spending 30 bucks on a bucket load of crap. Its really on the consumers shoulders to maximize the utility of their retail options. But that takes time and effort and all of us only have so much if any effort to give. I mean is it better to spend ten minutes to save a dollar or save ten minutes and spend an extra dollar?
Dollar General specifically also goes to places that have no local community retail. There is one three miles from me that was built a few years ago in this exact situation. Yet we won't see any quotes about that in articles like this that are just focusing on the negative.
Interesting. Do you know if Dollar General is cheaper per calorie when talking actual ready made meals? The linked article talks about worse price per ounce, which might mean something very different.
I've read that in times of economic hardships people survived on cheaper dog food without bad outcomes. Maybe it tastes even acceptable with some Sri Racha on it? Who knows.
Anyways... what I meant to say is probably something like don't be so fucking picky! (Regarding measurments and such.)
That's why, when you're a grocery store, you should stay a bit on top and join DG. I would even expect them to ask if you want to franchise with your existing clients.
My dad has such a small business, that was struggling under threat of potential new regulation to increase competition: he joined a big national franchise, destroyed the other stores and now HE is the big store. Maybe some of the same business will have to close, but the clients are happy because prices dropped, my dad can keep his 5 employees and push towards retirement with a valuable business to resell, and the regulator will be happy to see that not only big malls will survive their liberalization attempt.
The only people who lost are people who sat on their hands, looked at the sky in angst and complained people outside the village are coming to change things...
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.
It is confusing. There's also Family Dollar. I was a bit glad they combined them because I never remember which is which, but it probably does hurt their generalizations.
Also, in my experience when you can find the same items as the grocery, the Dollar store will be cheaper. They somewhat fit the description of a convenience store, but in terms of prices they are at the opposite end of the market with Walmart and Target.
I don't think Dollar General is the bad guy so much as a symptom of a problem. As it is, they're often in low income areas and have a high markup. Grocery stores have low margins that prevent them from entering these markets (hence food deserts). Dollar General fills that niche - but as a result low income people who already spend a disproportionate amount of their income on groceries have to pay that higher markup as well. Meanwhile I can go to Trader Joe's or something and get much better stuff, cheaper too.
I remember living in a rural area where people couldn't afford a car, but could walk to a gas station and pay 3x the prices on everything compared to if they bought everything at grocery store - it just helps keep them poor. And often, I think people see "dollar" in the name, and think that automatically means cheap, but being poor doesn't mean being financially literate.
If people weren't segregated into rich areas | poor areas, or maybe grocery stores found some other way to be profitable in low income areas, or some other thing, this wouldn't be such a problem. But as it is right now, they are filling a need, granted with negative side effects.
Edit: I realize the article focuses more on Dollar Generals causing food desserts, rather than being a response to them. Guess I'm focusing on more what I've seen.
outside of 'food deserts', there may be other factors people shop at DG. There's one a block from my office, and I drop in there now and then to get stuff (snacks, or light bulbs, or whatever). Almost every time I'm in there, I'll see an older person doing what seems to be a weekly shop (or more) - they'll ring up $70+ of stuff - canned/packaged foods. Clearly stuff for meals. They then get in to a taxi or rideshare car and are driven away.
.7 miles from here - in a more convenient area to drive to, is a Lidl, with everything that person bought about 40% cheaper. 1 mile away there's a Wegmans. 1.4 miles away there's Target, Lowes, and Harris Teeter. All just as accessible via taxi/uber as this DG.
The only real thing I can think of in DG's favor is it's very easy in/out - there's 2 counters, no self-checkout, the store is small itself. Just walking around to find what you want in those other stores would take 3-4x as long as hitting the 6 aisles in DG.
But... they're paying a terribly high price for that little bit of convenience. There's been a couple of times I've wanted to tell that person "hey, you can save $20 or more by driving another 3 minutes down the street" but I doubt it would be welcomed. I can't think of a way to intrude that isn't intrusive or patronizing. :/
> I can't think of a way to intrude that isn't intrusive or patronizing. :/
Because it is, people can spend their money however they like and they can value convenience or have any other reason to shop there. Also being old doesn't make them incapable of deciding where to shop.
when you see someone being told "this is $76" and they only have $70, and they have to decide - while I'm waiting behind them - what to put back... the thought of telling them "it's 40% cheaper 1 mile from here" crosses my mind. This exact scenario has played out in front of me 3 times in 2021.
And they tell you that they went there but the parking lot is too big, the carriages are too hard to push, they can't really stand in line a lot because their knee hurts them, and more.
I don't think people understand that sometimes your body makes savings not a savings. You don't miss good health till its gone, or the ability to do things with it.
Strike up a conversation. People do like talking about where to shop for the best bargains. "Hey, does this place have a good deal on X? I usually buy that at Lidl."
It's really hard to spend $70 at a real grocery store, isn't it? I feel like just a small number of items suddenly you're $100+. You certainly can't buy $1 batteries or light bulbs.
Granted, I'm shopping for myself, but buying goods for only a week or two out I don't feel like I spend $70.
If you go to a bulk store like Costco it certainly adds up. I don't go to those places because I can never use the stuff up fast enough before it goes bad.
Costco is a great place to buy non-perishables, dry goods, and stuff you can freeze the excess of. I agree it's hard to eat the fresh stuff but then again I don't have a family.
Good trick I learned while living the urban life was a highly raised bed, under the bed is super useful for storage space for things like extra paper towels.
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.
Spoilage if you don't eat it fast, which is part of the convenience factor you mention. Harder to protect fresh fruit & veggies from pests, than anything in a sealed package, which I think is a factor that doesn't get enough attention. And the smell of them will attract more pests. Once you're out of precious fridge space, assuming your fridge is well-functioning and its seals are intact enough to keep pests out, you'll need extra, reusable containers that seal to protect anything else... which can lead to even faster spoilage, with lots of fruits and veggies.
Meanwhile, the store-brand pop tarts can deliver 2,000 calories/day for like $3, and come with sealed-per-serving packaging. Sure, they'll give you diabetes and malnutrition, but....
If we have a semi functional system and a change made to it worsens the populations health it is more reasonable to stop this change and reverse over hoping for revolutionary change.
If some company has a buisness model that has negative externalities they should be taxed more for it. When taxing is not responsible because this would hit the poor dispropoertionally the buisness model should be banned.
It would be much easier and less corruption prone to just enact wealth transfers, especially via giving people more education opportunities and enhancing labor laws to allow time to invest in one's self.
I think the argument is that these are the only options in certain areas, so it's marked up higher than grocery stores.
I think many people on HN have not been in a dollar store, not all sell for a "dollar" like Dollar Tree. Dollar General and such usually have a "larger" markup on basic goods.
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.
It's worth pointing out the difference between frozen produce (which, as you say, is nutritionally sound) and frozen TV dinners, which often contain multiple times the daily recommended intake of sodium and typically have miniscule portions of vegetables.
Sure. But, if you lack the ability to make good use of frozen produce, then that maybe isn't a realistic option, anyway. Then you might be looking at something more like a choice between TV dinner and McDonald's.
I found quiet revelaing that a Dollar store in a pre announced shoot with a TV station couldn't show any more produce than is to be seen in this shot https://youtu.be/GtAvJBAJfnE?t=389
I specifically chose the phrase "make good use of" over the word "cook" because it's an important distinction.
Nobody can make a decent meal exclusively out of frozen vegetables; there just aren't enough macronutrients there. And everyone wants their meals to be appetizing. So it's not just about whether or not you can make frozen vegetables hot, it's about whether or not you can feasibly incorporate them into a nutritionally complete and appetizing meal.
Also, with TV dinners, you can buy just tonight's dinner on the way home from work, heat it up as soon as you get home, and have nothing left over to store. So, even though the food is frozen, there's no need to own a working freezer. With frozen vegetables, unless your meal plans typically involve eating half a pound of Normandy blend in one sitting, not so much.
Also, if you're time poor, you may not have time to actually cook or meal prep. Working multiple low income jobs is not uncommon, and those jobs often tend to have very erratic schedules that you can't plan around. (Usually around limiting your hours below 30, so that the health insurance requirement does not kick in.)
> There's a part of me that wants to push back against this idea that fresh produce is synonymous with good nutrition.
Whether the causality chain is over fresh produce or not. It is established fact that when a dollar store causes the close local grocers the nutrition and health of the local population suffers. On source for that would be Dr. Barry Popkin from University of North Carolina in this interview by CBS Monday morning https://www.youtube.com/watch?v=GtAvJBAJfnE
Nutrition available =/= nutrition consumed. If there was a large market for produce someone would seek to fill it...minimally with produce stands/farmers markets/etc.
The real issue is that all value created by the likes of Dollar General leaves the community. If the owner of the store is in the community, those dollars will more likely be spent withing the community. The increased tax value on the owner's home will be in the community. With Dollar General, all of that leaves.
Nobody in a Dolllar General is making much more than the proprietors of the old local store were making. Yet, their prices are cheaper. Why? Because Dollar General is taking a cut.
This may seem better to the local community at first (lower prices means more money in their pockets) yet this money is leaving the community forever. With the local grocery store, money flowed in circles, now Dollar General is extracting what value is in the community until the community dies.
The margin may have flowed in circles, but grocery margins are low, so most of the money leaves the community anyway.
A community needs a way to import money, not just a way to export less. That could be a locally owned store, but only if it's attractive enough to get clients outside of its community.
I think the problem, as the article states, is the “bifurcation” of the economy. Politicians talk about this as the erosion of the middle or working class.
Wage stagnation is very real and inflation, which remained somewhat muted is now also very real. The average cost of a new vehicle in the US is now over $40,000. That is almost double what it was 20 years ago. The cost of groceries, anecdotally, is almost double what it was 10 years ago where I live. And yet, wages have increased only moderately.
There is nothing wrong with Dollar stores. They serve an important niche. Most everyone has probably shopped at one. The problem is that this is the primary market demand. Dollar stores are many things, but “nice” or “pleasant” are not words used to describe them. People aren’t usually shopping at dollar stores as a first choice. People are shopping at dollar stores as an only or last choice.
More dollar stores means that these chains are seeing increased demand for their retail niche, which could be interpreted as a leading edge economic indicator that families are getting poorer.
- it is newly built. Building a dollar store is a fairly cheap way to raise the value of undeveloped land so some land owners use them as an exit strategy for declining communities.
- likely in an odd location, compared to other stores. The developers asked an inexperienced city council to rezone non-commercial land to approve the new build.
Dollar stores wouldn't be as much of an issue if they leased existing commercial space but this rarely happens.
Sub-optimal land usage can lower the chances of a depressed community from ever rebounding.
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.
One weird thing I've noticed about Dollar General is that they seem to get special versions of many products. Like sizes of food items/containers that I've never seen anywhere else.
I wonder if there are other differences in what they're shipped. Like how "outlet stores" get shittier versions of brand-name clothes.
IIRC, there are two primary reasons why dollar stores are cheaper:
1. Dollar stores do (as you say) offer products in much smaller sizes. This isn't necessarily bad for consumers: if you don't have the money to pay for extra product, it's to your benefit to shop at a store that lets you buy in smaller increments.
2. Dollar stores have no fixed inventory. They buy whatever brand is the cheapest at any given time, rather than trying to stock the same brands consistently. This leads to them often having unusual versions of products that aren't available elsewhere.
> Like sizes of food items/containers that I've never seen anywhere else.
Per-unit cost of dollar-store goods is often significantly higher than regular grocery stores due to smaller packaged quantities of the exact same product. It is terrible for poor people, but ridiculously profitable for the dollar stores.
>They don't have a produce section, just a bit of fruit. Is that the issue?
42% of the united states is overweight. nearly 20% of children are obese. dollar stores could be seen to directly undermine US health policy by displacing larger grocery stores and encouraging unhealthy consumption of overprocessed foods high in sugar salt and fat. "filling a niche" is an idea the marketing department came up with to justify selling garbage.
the lack of access to food (food deserts) and a healthy balanced diet are direct contributors to obesity and its myriad of comorbidities. They disproportionately affect people of colour and low income communities, and have been correlated with income inequality and the wealth gap across racial boundaries as well.
unpopular opinion: the "wealthy" version of the dollar store is Trader Joes in that both cater to the american "idea" of cooking food moreso than actually preparing a meal. Both rely on processed and frozen offerings of sugar salt and fat that present a reconstituted/reheated 'cooking' experience as opposed to actual cookery involving fresh ingredients and thoughtful planning. many people have a favourite product at these places, but few people can conceive of a favourite recipe they assemble from ingredients sourced at either.
I haven't looked at this enough to have a strong opinion on dollar stores in general, but it strikes me that the 20% of grocery products they don't stock (ie. produce) are the things that most people consume too little of.
I have the same experience with dollar generals, they tend to go in places where the only "competition" was driving further. And their prices tend to me pretty good, it's almost like a mini Walmart.
Putting "dollar" in the name makes everyone think of the dollar trees (everything $1), so I guess the author wants this to be a bit of a commentary on how this is catering to the poor possibly? But the other chains are essentially just well stocked stores. Who doesn't want to shop somewhere that's both convenient and cheap?
> 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?
> 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
These stores sell cheap junk most people will not buy if they gave the option of buying better stuff, so they're often considered a sign of blight, much like payday lenders. Besides that, the article seems to contend that they are driving businesses like grocers out of business, I would guess by undercutting them on high-margin items.
I thought the whole point of complaining about dollar stores was to mask concern for your property values and callousness to the impoverished as compassion. It struck me as more dog-whistle than any coherent non-cynical logic. "We don't want to get rid of the poor, just cheap stores. To help them!"
Brings to mind Vimes' "'Boots' theory of socioeconomic unfairness", from Terry Pratchett's Discworld:
"The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet."
The only thing that quote is good for this century is letting upscale consumers pat themselves on the back. Goods are so much cheaper than when that quote was written that using cheaper alternatives and treating them as disposable is often times cheaper in the long run for many classes of goods and usage patterns.
These sorts of tropes and rules of thumb that have been stripped of all nuance and packaged up nice and neatly so that the lowest common denominator consumer on the internet can read, understand and press the up-vote button are good for little more than achieving said upvotes. When subject to the complexities of real life they are wrong as often as they are right. You may as well toss a coin. There are unfortunately no rules of thumb you can follow that will outperform even a minimal application of critical thought.
I also read a partial rebuttal which amounted to "Rich people pay less because they can buy more durable boots, but they also pay more because they buy fancier boots, and the increased expense from buying fancier boots is more than the savings from the boots lasting longer."
There's also the question of why the poor person doesn't take out a loan to buy the more expensive boots, and pay off the loan with the money that he saves from not having to continually buy pairs of cheaper boots. Many poor people still have credit cards, and even the ones who don't can often trade favors or get loans from relatives.
And even the response "they should save up for the boots" isn't obviously wrong. For obvious reasons it's hard for poor people to save, but how often is it so hard that something like this isn't possible?
Okay, the quote might not be literally true for boots (or many consumer goods) in 2021, but it's a good intuitive explanation of why it's quote-unquote "expensive to be poor," which is absolutely a meaningful and important idea to understand.
A lot of it comes down to leverage: if you're poor, you have very, very bad options when it comes to borrowing money.
Say you're already living paycheck-to-paycheck, and then you fall and break your wrist. You don't have health insurance, so you go to an urgent care clinic, and have to pay $200 out of pocket (a very optimistic number!)
You were already gonna finish this week with less than $30 in the bank. Now you literally can't buy yourself groceries until Friday. What do you do?
For a lot of people, the answer is credit card debt (18-26% or more APR) or, worse, payday loans (20-40% PER MONTH if it's a legal place, worse if it's not).
Say you take out a payday loan at 20% to borrow back just that $200. Now you're gonna owe the place $40 at the end of the month. Congrats -- your bank account is now gonna be overdrawn. Hope you don't try and use your debit card, because now you owe $35 in overdraft fees, too.
If you can't borrow money cheaply, the very first time that you're forced to borrow, you are fucked if you can't get back out very quickly. And if you're in a place where you were going to a payday loan, there's very little reason to think you're gonna be able to get back out.
There's a lot of other shit. If you're poor you have a worse car that needs more maintenance/uses more gas/gets more traffic tickets. You get shittier sleep because your mattress is 12 years old and you're stressed all the time, so it's harder to even bring yourself to work. You can't afford a daycare, so you have to stay home with your kid an extra day every week, so you work fewer hours and make even less.
And that's not even scratching the surface of what it's like to live amongst poverty. Everything I've said can happen to someone who's trying their absolute hardest every single day, and doing it all "right"; and people aren't perfect. An unexpected kid, a drug addiction, getting involved with gangs; these things happen to well-meaning, good people, and trap them in a life of poverty in a way that's incredibly difficult to escape even if you do everything right afterwards.
It's a vicious spiral when you don't have a safety net.
Yes. On top of what the other person replied to in terms of borrowing power, you also have general goods. Buying in bulk saves money. But it requires you to be able to pay upfront for it. On top of that it requires storage and transportation too. It’s small things like buying 4 rolls of toilet paper vs 30 rolls. 30 rolls of toilet paper are expensive and take up space, but long term it’s the better option than 4. It’s the boots argument, but without the classist angle that OP is so upset about.
a decent pair of redwing boots will run $200-300 and last 18-24 months in a job walking daily before needing a resole ~150 that can be done 2-3 times. mine that I wear a couple times a week I got 18 years ago and have had to do a $50 re-heel of them is it. giving them 48 hrs to dry after wearing really extends the life of the leather
Also have some a few pair of Redwings Heritage boots. First real-leather shoes I bought were some Iron Rangers. I wore them as my main shoes for the first year I had them, nearly every day. Wore the absolute hell out of them. They still come out many times a year, and I treat them as work boots, so they get things dropped on them, I sit on the floor and crush them side-down for long stretches, et c. I also wore them up a couple mountain trails in the Appalachians maybe three years back, one a pretty damn long and high-elevation-change trail (do not do this, they are heavy as fuck compared to any modern hiking boot or, especially, shoe, it was a very bad idea) which beat them up plenty.
"Camp mocs", chukkas, and loafers have replaced them for everyday wear, for me, but that first pair of IRs still see some of my hardest-wearing days, probably 20-30 days a year.
Given the rate of wear for the ~2 years when I wore them very heavily, I'd say I could have gotten 5-8 years without babying them a bit (with a re-soling around year 4, probably). With my current usage pattern I expect they'll last about 20, with a re-soling at some point. If a person used shitty work boots for the really rough days to avoid abusing the expensive boots, and maybe kept some purpose-specific shoes for things like snow, heavy rainy weather (duck boots in both cases, perhaps), or hiking (god, just get a modern hiking shoe or boot, leather shoes are so heavy), 10 years of ~50%-of-days wear is very possible out of that boot style, I'd say. That may even be on the low side.
If you just bought cheap Walmart boots, you'd probably be spending $50 per pair, but need 2 pairs a year (maybe even more, but you're not putting a huge amount of wear and tear), call it $100/year. Over 18 years that's $1800!
In 2010, I lived in Houston and worked at an ice rink (which are opposite climates especially when walking on the ice -- so theoretically hard on any footware). I bought a pair of boots from Academy which cost $80. Those boots lasted until about 6 months ago when the center of the bottom of the rubber split.
Yes it's absolutely possible for well-built footwear to last a long time.
I’ve had that happen. I burn through heels, and need a resole every 3 or so, depending on use. Also a secret weapon is shoe trees. They keep away funk, and also seem to help the shoe last longer.
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.
Note the other stores mentioned: Walmart, Target and Costco--all discount stores. When you compare prices to convenience stores or drug stores the Dollar Stores are much cheaper.
And when you look at Walmart, Target and Costco remember time is money. And it takes significantly longer to shop at Walmart, Target and Costco (the long walks to and from your car, the long walk in the store itself, the waits at the cashiers).
How often are people going to Walmart/Target/Costco that walking time is a material factor?
I make weekly Costco runs and my total time car door back to car door is 15 minutes or less. I just order for pickup at Target, but even if I had to find the item, I can just see what aisle the product is in in the app and grab it and go within 10 minutes easy.
On the other hand, Dollar Tree or Dollar General is probably only budgeting 1 person for the staff, maybe 2 and so there is at most 1 register open 90% of the time. So you have a high probability of spending minutes just waiting in the checkout line. At Walmart/Target/Costco, you have self checkout and at Costco you have super fast staff at checkout with many lines open such that the lines are always moving quickly.
There's absolutely a difference. Going to Costco is a monumental hassle compared to Dollar General. They have few locations so for most people it's a farther drive. There's a line of cars snaking around the place waiting to buy gas. The parking lot is huge and I have to walk through it. Once inside, I have to pass the giant-screen TVs and half a warehouse of rarely-purchased items before I get to the food. All the food is in huge units. Often the lines at checkout are extremely long, and then there's another line to have my receipt checked before I get out. Then I have to load the stuff into my car - they don't bag it. Oh - and I paid a membership fee to experience all this!
Dollar General has many multiples more locations, and I can park right in front of the door. I'm in Costco every week and it's fine but yes, that walking time combined with everything else is definitely a factor.
I’d say it’s less about “time is money” and more about “I can afford 100 diapers with this week‘s pay check at 25 cents a diaper” and use my entire $25 budget if I go to Walmart, or “I can afford 25 diapers at 50 cents a piece and spend the remaining $12.50 on food - that will get me through this week” if I go to dollar general.
That’s literally the definition of living pay check to pay check - one’s outlook only cares about the next week or two, because you have to make trade offs between food, clothing, shelter, and essentials.
Is Target a discount store? It’s not Whole Foods, but I always heard it was a high-end Walmart. Costco is also known for really good quality, though the prices are still cheap.
Absolutely. When I do my grocery shopping, I occasionally think about how I could get a better deal on something at Costco, but I either don’t have the space or wouldn’t eat it fast enough.
The “they’re paying more per-unit because they’re buying smaller packages” crowd seems to realize this, but they think that the size packages they buy are the correct size, and anybody buying something smaller is being exploited.
Not really. I use dollar stores for junk stuff. I'll finish a bag of Oreos in a day, regardless of how much stuff is in it. If it's cheaper and smaller proportionally, whatever.
The reason smaller stuff is slightly more expensive is shipping costs. Compare two identical products in any store, the larger one will be cheaper, the smaller one will be more expensive, and this scales with weight.
TLDR: people who have never worked in retail, don't understand retail.
Also, saying that these stores are more expensive is crazy if you actually lived at a time when these stores didn't exist. These stores grew because production moved offshore for many products, and retailers took all that profit to their bottom-line (and the five layers of distributors). A lot of these chains cut this out and returned that profit to the consumer. Ofc, the product composition of each store is different (the ones with more FMCG do more optimisation of store size, range of products)...but yes, it turns out people will complain about lower prices...loudly (I have seen this in almost every country where similar formats exist, the loudness of the people complaining about low prices outweighs everything else).
I love the "invasive species" analogy, but it's just colorful BS.
> This follows two decades in which Walmart’s super-charged growth left small-town retail in shambles. By building massive, oversized supercenters in larger towns, Walmart found it could attract customers from a wide radius. Smaller towns in the vicinity often suffered the brunt of its impact as their Main Street retailers weakened and, in many cases, closed.
> Today the dollar chains are capitalizing on these conditions, much like an invasive species advancing on a compromised ecosystem.
Shouldn't it be harder to open a dollar store now that there's both an independent grocer and a Walmart? Who knows? Without facts, it's just whatever narrative supports the author's worldview.
I do believe in food deserts. But the simpler explanation is that fresh produce is more expensive than processed food, and stores specializing in expensive things don't do well in poor areas.
Fresh food isn’t just more expensive, but it’s also harder to handle and stock. Processed food comes in neat packaging that can be unit priced, and kept frozen or shelf-stable for long period of time.
A brand new Dollar General opened up in my town a few weeks ago. They are much cheaper than the two other local outlets on anything that they cross over on (frozen foods basically). Prices in my local area are very high and it is not an economically prosperous area to begin with.
I have visited a few times and while there are a few things it would make more sense to purchase there than locally, every other checkout interaction was truly awful. It isn't a big deal really, and the younger staff there clearly don't have much retail/working experience. But I'd rather not have to waste several minutes on what should be an in-and-out trying to get the cashier to understand that I should be getting substantially more back in change than she is trying to give me.
Ultimately I don't actually do much grocery shopping locally either way, because the prices are so high that it makes more sense for me to go 40 miles to Costco/Wal-Mart or about the same distance in the other direction to the Commissary on an AFB once a month.
I'd be okay paying a little more to support the local businesses, but most things are selling for double or more locally, and that is a non-trivial markup for me. So I mostly stock up on perishables locally in between big grocery runs.
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 and buy something that will last. (unfortunately ads don't contribute to model behavior here)
3. Overseas there have always been these cheap goods stores (100-goods stores in East Asia (百貨公司)), we're just late to the party --however in Asia these popped up because people didn't initially have disposable income as their economies evolved after ours. They are on the upswing, we're on the down.
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.
> 1. We have more people without much disposable income
In absolute terms, or just on average? This may be the case simply because the US population went from 250 to 320 million people over that time, but household disposal income is up considerably as well.
An alternative answer may be that Dollar stores have very low franchise fees (~$50K, from one site I looked at) and low inventory costs. This, along with cheap commercial rent, makes it an attractive option for non-tech people who want to start a retail business but don't have a lot of money saved up.
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.
This isn't new and your example is a good one.
Craftsman tools have always been cheaply made with poor metallurgy. They got by with the lifetime warranty because they marketed themselves at consumers who don't rely on their tools and don't use them very often. At least as far back as the 1950s and 1960s, people whose job depended on their tools wouldn't touch Craftsman.
I am always looking for ways to live frugally, and I think dollar stores have their niche, and there is good reason for their success.
In my experience, they are one of the best options for buying budget non-food items at low volumes where quality is not the most important factor. Things like cleaning products, office supplies, arts and crafts supplies, batteries, deodorant, candles, even common tools and repair equipment.
The reason is that if I want to save on many of this items, I would need to buy in bulk at a large store like Costco, or order on Amazon - at a greater volume than I need, and at a steeper price. (e.g. batteries, pens, superglue, oven cleaner, drywall patcher,rope etc..)
Not everything you use needs to be of premium quality, and these are the kind of items that large department stores and large online retailers have trouble competing against when selling at low volumes.
Now when it comes to food, there are better cheap ways to help undeserved communities. Large department stores waste a lot of good produce because it is close to their expiration date. Where I live, a couple of grocery stores specialize on selling this type of produce at a discount.
That is an incredibly privileged response to something like this. No one who is living in poverty or near the edge of poverty can even consider the additional cost associated with shipping or delivery, let alone on a weekly basis for core staples.
Reasonably priced fresh food access within walking distance should be a basic right. However, the people who need this most are those who are underserved.
But that’s my point. The case for retail increasingly only makes sense if a few extra dollars here and there matter to you and you need the savings it can provide.
So it makes sense that any increase in retail would be meant to serve that population.
I guess the point left to further discussion would be whether or not these stores truly server that population.
They clearly found a gap and a solid business model (for now) but is it a success from capitalism is concerned? or humanitarianism is concerned? I'd say the former and maybe a bandaid for the latter in some regions.
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.
Repurpursing the enormous waste of land that does no longer have commercial value into cafes, hair salons, take away places and whatever else seems a more diverse, vibrant place. It also means that if you have some creative use for commercial real-estate you are likely to be charged a lower rent.
I don't think you are right about the takeaways: there will be some need to meet at places that have food at low cost, and those places will naturally want to do take away on top.
I also don't get why you think they will be converted into poor quality housing, since poor quality housing is mostly old housing that isn't maintained probably and/or is in a bad environment.
A dollar general opened in my food-desert hometown a couple years ago. First new thing to open in decades that hasn't shut down within a year. Welcome addition to the town.
What point is this article trying to make? Dollar Generals and Family Dollars are not "dollar stores".
The data doesn't align with their conclusions; the article even admits that "Five Below", which are basically toy stores where everything is exactly $5, aren't "technically dollar stores", so clearly they must know that Dollar Generals and Family Dollars aren't either, which makes the whole headline fall apart.
Is this nextcity.org a political advocacy organization or something?
Good. I've started purchasing Birthday cards here. I've noticed Birthday cards costing 4-6 dollars at grocery stores. They are 50 cents to a dollar at the Dollar Store. Between family birthdays and kid birthdays, I think I spend close to 100-150 dollars a year on birthday cards. That's expense is now down to 20 dollars from Dollar Store.
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 like this. I see it as deeply beneficial to society. Not everyone lives in SF or NYC and can use their iPhone to order delivery 24/7.
> HN monoculture loves to crap all over things like this. I see it as deeply beneficial to society. Not everyone lives in SF or NYC and can use their iPhone to order delivery 24/7.
I'm disappointed that your comment was downvoted because you're absolutely correct.
The top comment says pretty much the same, except without the stupid generalization about the HN community. Just FYI, according to dang only 50% of HN users are even from the US, and only 10% in the Bay Area, so there is a fairly large contingent you are going to annoy with such generalizations.
The OP's comment is still absolutely correct if you replace NYC with Berlin or another European city. HN is very biased when it comes to certain subjects and, in all fairness, there is a large contingent of users here who are very willing to downvote comments simply because they disagree with their personal opinions.
Let me add context to why I upvoted the OP's comment. There are large portions of the United States (and I'm currently visiting one) where big-box discount stores simply don't exist. These are the same places where Amazon two day shipping is either not available or unreliable - Amazon doesn't pack everything in their inventory in every warehouse. Smaller discount stores add some variety, and are a benefit to people who would otherwise have to spend more in fuel and lost time to get to the nearest Costco/Walmart/what ever than they would save from lower prices.
This is an issue for a large minority of the United States, and may very well be an issue for a geographic majority (if not a large majority) of the country. I'm sure there are plenty of HN users who live in places like this, but it's also very, very likely that a majority of HN users, such as myself, live in urbanized regions - whether in the US, the EU, or in other developed areas.
While it's certainly expected that these users will have different views and opinions based on their situations and life experiences, echoing the OP's comment, I've noticed that many of them have a concerning lack of empathy for people who come from different backgrounds.
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.
There are several Dollar Trees that are fully stocked and busy in the suburban Southern California city I used to live in. Not sure how that makes them "defunct"
Edited to say it must be local. They have largely disappeared around here. They usually only sold Tupperware and beach toys anyway, so I’m not sure how they apply to the article, but I’m just moving the goalposts there.
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:
The truth about the mom and pops is that they had very limited selection, high prices, long delivery times, and often were owned by the local business man rather than a decentralized group of independent business owners. I recommend listening to the podcast before knee-jerk deciding that you know everything.
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.
> often were owned by the local business man rather than a decentralized group of independent business owners
You imply this is undesirable. Care to elaborate? A large talking point during the protests last year was businesses in Black communities being owned by people outside those communities, or more often than not, by large corporations.
Or are you suggesting that a lot of the owners actually owned multiple such shops and that this isn't true for the shops that replaced them?
If the idea is that every mom and pop was ran by self-directed, profit-motivated independent business persons who captured more of the profit, this is not often the case - the employees of these stores made the same going labor rate of any retail employee, it was just a local business man who ran the businesses rather than a conglomerate. One benefit of a large corporation like Walmart is the share holders are far more distributed.
My general point is that this fantasy of a "mom and pop utopia" of small businesses that Walmart and similar destroyed is just that - a total fantasy. They were not a dream situation and they went away because they were not the best for consumers or their community, not because of some grand conspiracy.
This is assuming "mom and pop stores" are beneficial. We certainly like them when driving through picturesque small towns but I know a lot of people living in those towns that prefer an efficient supplier. They understand what they lose but prefer to save money on their shopping trips.
Walmart not only sells merchandise cheaper than "Mom and Pop", they almost certainly pay their employees higher wages than Mom and Pop ever did. They also have a 401(k) (fully-vested after only 7 years) and an education program that covers tuition, books, and fees for majors of interest to Walmart (e.g., IT and supply-chain management).
The opportunities for advancement at "Mom and Pop" were pretty much limited to "Son or Daughter". By contrast, the current CEO of Walmart (annual compensation $22 million, net worth > $100 million) started working there as a summer job in high school, unloading trucks, and has never worked anywhere else.
No, not usually. Usually they are replacing a less profitable, but larger grocery store with a highly profitable, smaller dollar store. It's a greater profit at the cost of product selection.
In much of the midwest wallmart in 90s went to the biggest cities every 40-60 miles then that led to all local non chain spartan grocery stores going under. Driving back to my parents over past few years have seen all the small towns that used to have a grocery store now have a DG to take care of at least some needs and having to drive an hour for some laundry soap. DG has spent a lot of time figuring out the 60% of what you need with almost all goods same price as walmart
There is no such thing as a monoculyure here. posts that are critical of dollar stores get down-voted plenty. The only type of post / viewpoint that tends to get down-voted a lot is anything too conspiratorial. Or too extreme left/right on the economic spectrum.
The difficulty is that it can be both. Dollar stores almost certainly do SOME kind of good, otherwise they wouldn't exist. Unlike SV startups, I doubt the companies behind them are interested in burning piles of money without turning a profit. They ARE turning a profit, which means people are coming it, which means people find the service offered attractive.
That said, people also find the service offered by drug dealers attractive. And yet if the number of crack dealers in your neighborhood explodes overnight, it's unlikely most people will see that as a positive development. A healthy neighborhood is not one riddled with drug pushers, and a healthy economy is not one riddled with dollar stores. There's nothing wrong with a few discount stores, in the same way there's nothing wrong with someone stopping at a fast food place every once in a while. But if you're eating every meal there, something isn't right.
Why are we conflating discount stores with (illegal) drug dealing?
One offers convenience, along with relatively cheap products at relatively cheap prices. They occupy retail spaces in lower-end retail outlets that would - in current conditions - likely go unoccupied.
The other is an illegal activity engaged in norms-violating economic behavior outside of the rule of law.
Great, more cheap stuff from Asia. Let’s send all of our money to owners and managers of sweatshops and dirty factories. I’m a big fan of globalization in general, but this is such a ‘stop hitting yourself’ moment for me. There has to be a reasonable middle ground between naked free trade and ISI, right?
I’m being a bit facetious, but I’m all fairness - most of the crap sold at these dollar stores are made in less than humane working conditions, or is completely automated generating few jobs and large profits for people preposterously more wealthy than the median income.
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.
No and I think the article is banking on this confusion.
Dollar General is like a micro walmart and stocks the exact same stuff for more or less the same prices. They are actually great little stores that, around me anyway, service communities that would otherwise have to drive 10+ miles to get what they need most of the time.
Dollar tree used to sell everything for $1: I don't know if they still do or not. The products they sell are limited, and very, very, very cheap. It is amazing, really.
Dollar General and Family Dollar both sell things over a dollar.
Coincidentally, I just heard on news radio this morning that Dollar Tree was one of the few, if not the only, still sticking to the max $1 per product model.
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.
> 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
I'm not sure why this is especially "predatory". It is totally normal for smaller quantities of an item to sell for a higher unit price.
Wheat is trading for $229.00/metric tonne right now. Loaves of bread are selling for about $5.00/kilogram, or $5,000/metric tonne. Is that "predatory"?
Part of the business model is to work with manufacturers to offer smaller packaging, i.e. less product, for the same price. Consumers are more sensitive to price and not unit price.
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.
As Walter Bright mentioned in another comment, they used to be “dime stores” or “five and dime stores.” The dollar store label worked well for several years, but you’re right that it’s hard to sell a lot of merchandise for $1.
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.
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.
If you’ve passed by working class communities in a big city, all you would see throughout the pandemic are food lines. Even with the stimulus, the working poor were lining up for food. Not ready to serve meals, but literal eggs, milk, bread.
But everything else in retail around me is Chipotle, Noodle's & Company, Nails place, some other equally ubiquitous brand ... and yet there's lots of retail space available near me that is nice, but empty. Seems wasteful.
Is Dollar General really considered a Dollar Store? When I think Dollar Stores, I think as bit lower on the product scale like Dollar Tree and its ilk. Dollar General is basically a compact Walmart.
It isn't and it really calls into question the rigor of the author, and also gives you a laugh about the hackernews crowd as well. Dollar General is _not_ a dollar store, its a general store where prices are not tied to "a dollar".
Though "dollar stores" have items that are not always only $1, the bulk of their inventory is keyed in on that price point, Dollar General has no such paradigm.
Dollar General and Family Dollar are not "dollar stores". A "dollar store" is like Dollar Tree, where everything is a dollar. This article conflates the two.
I think the issue is rural areas aren’t viable, even tourism is proving too labor intensive.
I’m “summering” in a rural part of NY and Dollar General is a bigger messier version of a sundries shop. They don’t have the value-size packages of items but they do have various price points of trash bags for instance.
Probably due to competition from big box stores at the distributor level it’s expensive/competitive to get product across vast depopulated areas to stores so there are few of them. And the local economy can’t support enough stores to cover the land mass.
Dollar General tackles this and prices it in but also cuts the overhead of a full-service grocers like a deli counter, butchers and produce.
There are a few full-service grocers for the affluent business owners, tourists and people at their lakehouses. They’re usually near a few fine dining restaurants and a weekly farmer’s market.
Propane delivery companies probably look predatory if you look at the areas they serve. No telling how fast they will consolidate nationally like retail has.
Dollar stores are for poor people. Americans are becoming impoverished. Elites are getting richer, thanks to Fed policy and our bailout economy that creates inflation at the expense of the saver.
Do you mean "dollar stores" like this story means to refer to general stores, or actual dollar stores like Dollar Tree (the only one they got right) and 99 Cents Only?
It seems like the reasons you're wrong would be different in each case, because the value proposition is different, but I don't see the argument either way.
Our local one is excellent, plus the wine deals are amazing.
It's funny how many branded items here are 1/2 the price of the local 'normal' grocery stores.
Of course, when you peek at other peoples' carts, garbage food can be strongly associated with the weight of the cart pusher (or a rough guess at the socioeconomic class), but at least they have the opportunity to eat well on the cheap.
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 issue?
Are the small independent grocery stores in these communities stocking produce? Is Dollar General and the like creating some kind of price cartel that's putting them out of business? I know of two Dollar Generals near me, one in a small one-light town that previously only had a gas station convenience store and people had to drive 12 miles to get anything besides milk, condoms and beef jerky. The other on the outskirts of a small town that still has a thriving small grocery store in the middle of it.