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“Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America. It’s based on the concept that
by gervase 9y ago
“Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America. It’s based on the concept that the jobs went away, and the jobs are never coming back, and that things aren’t going to get better in any of these places.”
That's a pretty strong quote to bury halfway through the article.
- occultist_throw 9y agoI would concur with that paragraph. When I was driving through South Indiana and Kentucky, I saw dollar store after dollar store after Dollar Store. I would see a little town with one to three dollar stores. These little towns all had something in common. They had no noticeable industry, very limited business opportunities, and dilapidated and or dying community. My and assessment, just driving through, is that these towns were all dead ends. I really hate saying that about people because it shouldn't be true. But for all intents and purposes they looked like they were in the last stage of existence.
- smelendez 9y agoBut would people still shop at dollar stores if they had more money? I sort of think so--New York is incredibly prosperous, and there are dollar stores everywhere, visited by rich and poor.
- occultist_throw 9y agoI can't speak for New York. I've never been there. My experiences are that of portions of the Midwest in Indiana, Kentucky, Tennessee, Virginia, Missouri. Larger places will have Walmarts and will have grocers and more industry. What I see time and again our little towns that are too small to support even a Walmart or a grocery have one or two Dollar Generals. I'm not an economist and not sure what to make of that other than that a Dollar General seem to be pretty cheap to set up pretty cheap to stock and I guess and implicit acknowledgement that these markets are failures for anything other than dinky stores. (edit: android voice to text mistakes)
- quxbar 9y agoUh... What? Not true. Living in NYC for the past 4 years, before that I lived in rural Ohio and Texas. There are no dollar general or dollar tree stores here, just kinda expensive mishmash-of-crap stores, Duane Reades and Rite-Aids.
- adamqureshi 9y agoHop on the 7 train. Goto jackson heights. Plenty of rink-dink dolla shops. Also check main street flushing.
- richardfontana 9y agoThere's Jack's 99 Cent store, which has at least two locations in midtown Manhattan. http://www.jacksnyc.com/ http://www.jacksnyc.com/
- shoover 9y agoYes. At the other end of Indiana there are small towns continuing to do well due to the RV industry (which only seems to grow). At least in the town I'm from the DG is always busy. OTOH in Indianapolis we also have dollar stores but not everyone uses them.
- sp332 9y agoI'm curious how those towns even got started. It's not like there was ever much going on in small towns in Indiana. How did it manage to get even worse?
- drharby 9y agoThat whole...uh...homestead act thing
- PKop 9y agoI think you underestimate the scale and magnitude of the industrial, steel, and auto industry dominance in some of these areas, and then the precipitous decline since. https://en.wikipedia.org/wiki/Rust_Belt https://en.wikipedia.org/wiki/Rust_Belt “Before World War II, the cities in the Rust Belt region were among the largest in the United States. However, by the twentieth century's end their population had fallen the most in the country.” Knowing nothing else about the particulars of why this was the case, it’s easy to see that this change would have drastic consequences for these areas.
- Retric 9y agoFarming used to take a lot of manpower. So, the industry was largely what's going on between these small towns. Cars reshaped the landscape as stores / restaurants / movie theaters etc could draw from a large enough population to support themselves. However, farm automation drastically reduced the number of jobs causing young people to move out. Eventually you can't really support much, but the travel distance allows for some shops in these nano towns. Remember, 80 acres used to be a viable small farm. Now 800 acres are generally just a hobby unless your raising livestock and buying a lot of feed.
- taurath 9y ago1. It used to be possible to make a bit of a living by doing your own farming. Now if you aren't industrial scale you probably won't even make a profit, let alone a living. 2. Globalization - Look around - there are almost always old warehouses either for food, lumber, or a small manufacturing plant that are run down - usually a few blocks away from downtown. These places one by one couldn't compete manufacturing cheaper goods from china or elsewhere 3. Walmartization - big box stores come in from out of town, suck up all the economic activity, pay people nothing, and ship all of the profits to HQ. Then the walmart closes, and there is nothing left.
- smelendez 9y agoNot sure I agree with it. I think a lot of the appeal of Dollar General, in particular, is that they're selling name brand goods at reasonable prices, close to where you are. Instead of driving or taking the bus to the Kroger or Walmart, you can stop in at the nearby Dollar General. Their stores are more like Walgreens or CVS without pharmacies than like traditional "dollar stores." Dollar Tree is a little bit different--they are a traditional dollar store, where everything is $1 or less and the offerings reflect that. You have to hunt for the bargains that are actually worth it, and some of their aisles have omissions that only make sense because of the price limit (like the tools section won't have hammers).
- brudgers 9y agoThe expansion of Dollar General described in the article is in places unlikely to have bus service or a Kroger or CVS/Walgreens nearby. Those chains rely on high traffic counts found at busy intersections.
- frogpelt 9y agoYou are correct. In the small town where I live, we have two options: a local overpriced grocery store and a Dollar General (also overpriced). Both survive because they are convenient and close. I can get a gallon of milk 20 miles away at Walmart or ALDI for $1.00. A gallon of milk at one of these stores is $4.00.
- bbarn 9y agoI think to a degree there's some equalization happening that small towns can't handle. I can't buy a gallon of milk for under 4$ anywhere in the urban area I live. Even if I drive up to walmart on the edge of the city. When I travel to smaller towns (which is a lot - I'm gone almost every weekend camping, exploring, biking, what have you) I'm often shocked at how places so far from transportation hubs can have goods so cheap. I don't believe it's sustainable, and the more the economy becomes de-localized, the less it can be realistically sustained. I think small towns like this are in for further decline the more centralized commerce becomes. It saddens me to say this, but many of these small towns don't provide much for the current big company driven economy, so why should the big companies care?
- kcorbitt 9y agoI disagree with the assertion that discount stores are dependent on economic stagnation. I live in a dense urban area well served by traditional retailers, and have a great job that allows me to shop wherever I want. And yet, half my shopping trips for household goods seem to be to Dollar Tree. They've got equivalent products to other stores, except that almost everything is 50%+ cheaper. You don't have to be part of a "permanent underclass" to appreciate cheap.
- code_duck 9y agoAnecdotally... I have a close friend who is a PhD, has tens of thousands in the bank, a great job, and absolutely loves the dollar store.
- samstave 9y agoI love daiso - the Japanese dollar store. It's amazing.
- coffeevradar 9y agoExcept that they charge $1.50 for everything. Which is only annoying because similar stores in Japan (which for me are a highlight of any trip to Japan) only charge ¥100. I don't know if it's because of proximity to China or because Daiso knows they're offering better stuff than their literally $1 competitors here in the U.S.
- clairity 9y agodaiso is great. in LA, we now also have http://miniso.com/ http://miniso.com/ (which i'm sure will expand to other major US cities soon).
- stevenwoo 9y agoThanks for that - there's one near me in Mountain View but I could not for the life of me tell what Daiso was from window shopping while going on trips to Trader Joes.
- 9y ago
- fasteddy 9y agoThere's a Daiso in Seattle about a block from our largest Asian market. Lots of interesting stuff all for $1.50.
- dsfyu404ed 9y agoThe full context tells us a little more. >“It reminds me of a craps table,” Brown, the commercial real estate analyst, says. “Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America. It’s based on the concept that the jobs went away, and the jobs are never coming back, and that things aren’t going to get better in any of these places.” To it sounds like he doesn't understand that: 1) Being able to exist in places other stores cannot lets DG capture a ton of sales that would otherwise be rolled into a planned trip somewhere else. If you need more toothpaste and your options are Walmart that's 1hr away or DG that's 30min away where are you going? If DG or some other store can pay the bills the month that nobody happens to run out of toothpaste ahead of schedule they are around to turn a profit on a good month. 2)Rural areas are sparsely populated by definition. They do not have enough customers to support many stores that sell the same thing. In suburban and urban areas some stores turn a profit with volume by attracting poor people with razor margins and other stores run thicker margins (or have higher costs) which make the poor people shop elsewhere but they make it back because the people who don't want to shop among poor people shop there instead. There just aren't enough customers to sustain this in a lot of rural areas. 3) You don't have to be poor to want to buy things at low prices.
- HeyLaughingBoy 9y ago3) You don't have to be poor to want to buy things at low prices A ridiculous number of "analysts" either ignore, or don't realize this. I have a 6-figure income, yet my wife will buy the cheapest crap she can find that will do what we need. Boots? Buy expensive ones that will last and not leak. Hallowe'en decorations? Head for the dollar store.
- ajmurmann 9y agoTo your third point: I think there issue here is that wealthy people are also more likely to buy different products. I got example only buy Jersey milk and pasteur raised eggs. Because of that alone I have to stop either at Whole Foods or a similar local chain. I but most other staples at Costco. Stopping at one more store to save a small amount of money most of the time isn't worth the hassle.
- Shivetya 9y agoits not a truth, it is merely what some believe or want others to believe. the simple matter is many small towns were abandoned by larger retailers when they consolidated their stores in far larger models. there is always an allure of only having to drive a short distance to obtain regularly needed goods. it gives a feeling to many that they aren't in the backwoods. for some it is all the community they will ever have outside of church and school. yet what the larger stores forgot is the good prices aren't always key, being quick to get to is. Dollar Tree/Dollar store remind me in some ways of some European grocery chains that have and are coming to America, shying away from large "centrally" located stores with tens of thousands of items instead for a tightly controlled and easily managed inventory in smaller lower cost areas.
- hitekker 9y agoI'd like to see some figures showing that the economically immobile form or will likely form the bulk of Dollar Store's profits.
- crushedpeanuts 9y agoI happen to agree. I live all of 20 minutes from the article's location and drive through it twice a week on average (I live in Grove, OK) DG's got several stores around here, and it's amazing on the placement of them to be honest. It isn't really just a "find a hole in the ground where there's no competition" Dollar General (at least in this area) likes to plant a store in a location that is just outside of the city limits and soaks in a TON of business on the dynamic of "do I drive all the way in town for X, or do I make a quick trip." Across the board, they aren't cheaper on a unit by unit cost, they just offer smaller amounts/package and sell for slightly less to give that perception. One down the road next to me is always packed. They're just too accessible when the alternative is driving half an hour into town.
- deelowe 9y agoDG has pivoted to focus much more heavily on brand name common use items. They still carry extremely cheap stuff, but the vast majority of their sales comes from everyday items like toothpaste, medicine, snacks, etc...
- komali2 9y agoMy friends and I argue about this all the time - does the world go the way of Star Trek, or Blade Runner? "The Culture Series," or "Snow Crash?" I think dystopic cyberpunk universes are unsustainable - I don't get how you can cram hundreds of millions of under-classed people into what are essentially poverty ghettos without a total outright revolution, or just an apocalypse event that resets the technological scale or eradicates the human race. My perspective is that improvements in automation will lead to inevitably a realization that "working for food" is a dated concept that will go away. Hopeful, sure, but it's that or death in my opinion. To see a business betting on the other end-game... that's harrowing.
- orf 9y ago> I don't get how you can cram hundreds of millions of under-classed people into what are essentially poverty ghettos without a total outright revolution China seems to be giving it a pretty good go
- jackbravo 9y agoBut that's how it has been for years, at least on third world countries. I live in Mexico and we know that the big companies here have been betting on that end-game since last century =P. The two biggest and most influential companies in Mexico: Telmex (from Carlos Slim) and Televisa are known to cater to the low income audience. Televisa's owner, in 1993 said that they made TV programs for "jodidos" (slur for poor people)[1]. [1] http://www.proceso.com.mx/336733/television-para-jodidos http://www.proceso.com.mx/336733/television-para-jodidos
- ryandrake 9y ago> I don't get how you can cram hundreds of millions of under-classed people into what are essentially poverty ghettos without a total outright revolution Distract them Facebook and reality TV.
- princeb 9y ago> I don't get how you can cram hundreds of millions of under-classed people into what are essentially poverty ghettos without a total outright revolution a number of these universes seem inspired by a real life city... Hong Kong.
- DoodleBuggy 9y agoBut hard to argue with, it would take significant efforts that are unimaginable with modern politics/lobbying to reverse that.