6 ms·

I kinda felt like this was an article that had a missing Character, like covering the 2016 election but not mentioning Bernie or Comey. The reality is that Wal

I kinda felt like this was an article that had a missing Character, like covering the 2016 election but not mentioning Bernie or Comey. The reality is that Walmart's Chinese-sourced non-food goods (including clothing, auto parts, and general household supplies) were priced 50+% cheaper than many non-food (and higher profit) items one could get from a grocery store, once you're at Walmart then, well you're at Walmart. This, combined with the insane Dollar General growth mentioned likely is why many of the local stores died. I always kinda felt that this kind of marketing positions sometimes actually harm the market, kinda like how Amazon's $50 android tablets trashed the non-iPad market by taking all wind out of their sails. Also, for those not familiar, dollar General is not a dollar store as its name implies. They sell cheaper, lower quality items at a markup vs department stores but their secret weapon is incredible organization efficiency with cookie cutter free standing stores that are made simply using cinderblock construction and templated layouts. Their turn around after starting construction to store opening is less than two months at a very low cost in strategically placed places that lack close grocery/department stores. If you made a heat map of all the grocers and department stores in a rural area in the northeast with red for 'near grocery store' and green for 'not near', the dollar general onslaught would almost exactly be an inverse map, identifying low income areas. This is even true in suburban areas where driving is required to get to a grocery store, with dollar general's popping up in the projects.

lotsofpulp 7y ago
It would seem the issue is with low incomes rather than with Dollar General.
- AgloeDreams 7y ago
  Oh for sure, but stores focused on bringing high margin cheap imported goods and base minimum wage jobs into communities that formerly bought locally produced goods does not exactly help this problem. Dollar General's expansion would burn if the minimum wage were raised.
  - war1025 7y ago
    That would be a pretty strong incentive for certain groups to oppose a minimum wage hike then. In my experience, a small town in the midwest is likely to have 1. A grocery store, 2. A hardware store, and 3. a Dollar General. If you come along with a plan that is going to shutter one of the three remaining businesses where you can buy actual day to day goods, people aren't going to be too thrilled.
    - AgloeDreams 7y ago
      Very much so.
  - kd0amg 7y ago
    communities that formerly bought locally produced goods How long has it been since these communities actually did that? Small towns can't really support the diversity of industry it takes to buy more local goods than shipped-in goods in a modern-day lifestyle.
    - bluGill 7y ago
      Never for most of rural areas. By the time most towns in say Iowa were getting setup the industrial revolution was underway: the town wasn't making anything, the blacksmith was taking mass produced horseshoes and fitting them to the horse. What the town did produce (example: brooms...) wasn't for the town it was for the whole country. The newspaper was produced for the town. Everything else was either services that can't be mass produced or the town was doing their own mass production for export.
    - AgloeDreams 7y ago
      Sorry, by locally produced, I'm referring to (mostly) foodstuffs, additionally, local small retailers that were resellers.
      - msla 7y ago
        > Sorry, by locally produced, I'm referring to (mostly) foodstuffs, additionally, local small retailers that were resellers. A town in the Great Plains doesn't have a climate fit to make most foods locally, unless you call taking shipped-in ingredients and cooking them "making" food.
- burner831234 7y ago
  This is the thing @lotsofpulp that everyone else seems to be missing. The amount of your income that is available to spend on goods after all of your other fixed expenditures. This has been so solidly tracked in terms of stagnant wages and applies to the SMB in the area as well. Open a grocery and try to staff folks and have consistent supply of goods. Deal with shrinkage, spoilage and inefficient supply chains. Meanwhile Wal-Mart (or other MNC) has a ton of capital, their employees are on social services and the cost of their goods for this town's store is in a negotiation of not one store but thousands. People spend what they can. The middle class shows us this in their consumption of target over walmart and other such brand divides.
  - smileysteve 7y ago
    > their employees are on social services I find this point irrelevant. As other posters have posted, the local store could rarely pay above minimum wage. Walmart not only beats minimum wage, but has a rather extensive benefit plan. (The same can be said for McDonald's, Chipotle, ChickFilA, and Starbucks.)
jessaustin 7y ago
I can think of recently-constructed DGs that are in the middle of nowhere, but I can also think of a few that are like a block from an existing grocery store. I think DG development are more concerned with seeking high traffic (at least relative to the local area) than with low density. They're never going to be in a "good" location, but usually their "bad" locations are right on a busy highway.
war1025 7y ago
I don't think Dollar General targets places without any businesses, at least around Iowa where I have experience with them. They target places where there is some community, but not enough to support a bigger general store (i.e Walmart). There is a Dollar General about a half mile from my house. It is literally next door to the local grocery store. They serve similar but different purposes. Dollar General is where you go to get something that you'd usually get in the city. Obviously, less selection and lower quality, but focused on stuff rather than food.
- bduerst 7y ago
  The entire strategy for dollar stores (Dollar General, Family Dollar, Dollar Tree, etc.) is to out price their local competition - hence why yours is right next to a grocery store. They carry higher-profit margin goods, which are mostly canned and processed foods, but ditch the lower-margin items like fresh produce. Grocery stores can't compete with them unless they also ditch their healthier foods. There are entire communities in the U.S. who don't have access to fresh produce but do have access to five dollar stores. There was an interesting planet money podcast on it called "Dollar Stores vs. Lettuce".
  - war1025 7y ago
    I would argue that Dollar General has morphed itself away from the traditional "dollar store" model and is focusing much more heavily on the "general store" idea of old. Sure you can get cheap stuff there, but not significantly cheaper than the similar products that a grocery store would have. Their edge is that they are open later and have more of a focus on stuff that you are likely to need last-minute. For example, when our kids were still wearing diapers, Dollar General was a typical stop as soon as we got to my mom's house for the weekend. Similarly, if you're out of shampoo, toothpaste, etc. Dollar General is going to have a better selection than the grocery store. Need a birthday card? Dollar General. My mom likes to go there for cheap outfits for the grandkids. We don't get clothes there, but they have a decent selection. In my experience Dollar General is an asset to a small town. It complements the other businesses rather than driving them out. Contrast to Walmart, which will do its best to kill small business.
anongraddebt 7y ago
Solid comment. It'd be interesting to see how much of an effect DG stores in areas with few to no businesses have on mega retailers like Wal-Mart. My parents are 15 mins. from a Wal-Mart, but 4-5 mins. from a DG that opened two years ago. They've probably reduced their Wal-Mart spend by at least 20% from what it had been for two decades.
dsfyu404ed 7y ago
>The reality is that Walmart's Chinese-sourced non-food goods (including clothing, auto parts, and general household supplies) A surprising amount of stuff in home good stores is US/Canada/Mexico made. The production of many home goods is a natural fit for developed nations (this is way outside the scope of this comment but they're generally highly automated and clean eroding the two primary advantages of offshoring) and then when you tack shipping on top it makes sense. North America makes a heck of a lot of stuff, it just doesn't employ many people to do it.

lotsofpulp 7y ago

It would seem the issue is with low incomes rather than with Dollar General.

AgloeDreams 7y ago
Oh for sure, but stores focused on bringing high margin cheap imported goods and base minimum wage jobs into communities that formerly bought locally produced goods does not exactly help this problem. Dollar General's expansion would burn if the minimum wage were raised.
- war1025 7y ago
  That would be a pretty strong incentive for certain groups to oppose a minimum wage hike then. In my experience, a small town in the midwest is likely to have 1. A grocery store, 2. A hardware store, and 3. a Dollar General. If you come along with a plan that is going to shutter one of the three remaining businesses where you can buy actual day to day goods, people aren't going to be too thrilled.
  - AgloeDreams 7y ago
    Very much so.
- kd0amg 7y ago
  communities that formerly bought locally produced goods How long has it been since these communities actually did that? Small towns can't really support the diversity of industry it takes to buy more local goods than shipped-in goods in a modern-day lifestyle.
  - bluGill 7y ago
    Never for most of rural areas. By the time most towns in say Iowa were getting setup the industrial revolution was underway: the town wasn't making anything, the blacksmith was taking mass produced horseshoes and fitting them to the horse. What the town did produce (example: brooms...) wasn't for the town it was for the whole country. The newspaper was produced for the town. Everything else was either services that can't be mass produced or the town was doing their own mass production for export.
  - AgloeDreams 7y ago
    Sorry, by locally produced, I'm referring to (mostly) foodstuffs, additionally, local small retailers that were resellers.
    - msla 7y ago
      > Sorry, by locally produced, I'm referring to (mostly) foodstuffs, additionally, local small retailers that were resellers. A town in the Great Plains doesn't have a climate fit to make most foods locally, unless you call taking shipped-in ingredients and cooking them "making" food.
burner831234 7y ago
This is the thing @lotsofpulp that everyone else seems to be missing. The amount of your income that is available to spend on goods after all of your other fixed expenditures. This has been so solidly tracked in terms of stagnant wages and applies to the SMB in the area as well. Open a grocery and try to staff folks and have consistent supply of goods. Deal with shrinkage, spoilage and inefficient supply chains. Meanwhile Wal-Mart (or other MNC) has a ton of capital, their employees are on social services and the cost of their goods for this town's store is in a negotiation of not one store but thousands. People spend what they can. The middle class shows us this in their consumption of target over walmart and other such brand divides.
- smileysteve 7y ago
  > their employees are on social services I find this point irrelevant. As other posters have posted, the local store could rarely pay above minimum wage. Walmart not only beats minimum wage, but has a rather extensive benefit plan. (The same can be said for McDonald's, Chipotle, ChickFilA, and Starbucks.)

jessaustin 7y ago

I can think of recently-constructed DGs that are in the middle of nowhere, but I can also think of a few that are like a block from an existing grocery store. I think DG development are more concerned with seeking high traffic (at least relative to the local area) than with low density. They're never going to be in a "good" location, but usually their "bad" locations are right on a busy highway.

war1025 7y ago

I don't think Dollar General targets places without any businesses, at least around Iowa where I have experience with them. They target places where there is some community, but not enough to support a bigger general store (i.e Walmart). There is a Dollar General about a half mile from my house. It is literally next door to the local grocery store. They serve similar but different purposes. Dollar General is where you go to get something that you'd usually get in the city. Obviously, less selection and lower quality, but focused on stuff rather than food.

bduerst 7y ago
The entire strategy for dollar stores (Dollar General, Family Dollar, Dollar Tree, etc.) is to out price their local competition - hence why yours is right next to a grocery store. They carry higher-profit margin goods, which are mostly canned and processed foods, but ditch the lower-margin items like fresh produce. Grocery stores can't compete with them unless they also ditch their healthier foods. There are entire communities in the U.S. who don't have access to fresh produce but do have access to five dollar stores. There was an interesting planet money podcast on it called "Dollar Stores vs. Lettuce".
- war1025 7y ago
  I would argue that Dollar General has morphed itself away from the traditional "dollar store" model and is focusing much more heavily on the "general store" idea of old. Sure you can get cheap stuff there, but not significantly cheaper than the similar products that a grocery store would have. Their edge is that they are open later and have more of a focus on stuff that you are likely to need last-minute. For example, when our kids were still wearing diapers, Dollar General was a typical stop as soon as we got to my mom's house for the weekend. Similarly, if you're out of shampoo, toothpaste, etc. Dollar General is going to have a better selection than the grocery store. Need a birthday card? Dollar General. My mom likes to go there for cheap outfits for the grandkids. We don't get clothes there, but they have a decent selection. In my experience Dollar General is an asset to a small town. It complements the other businesses rather than driving them out. Contrast to Walmart, which will do its best to kill small business.

anongraddebt 7y ago

Solid comment. It'd be interesting to see how much of an effect DG stores in areas with few to no businesses have on mega retailers like Wal-Mart. My parents are 15 mins. from a Wal-Mart, but 4-5 mins. from a DG that opened two years ago. They've probably reduced their Wal-Mart spend by at least 20% from what it had been for two decades.

dsfyu404ed 7y ago

>The reality is that Walmart's Chinese-sourced non-food goods (including clothing, auto parts, and general household supplies) A surprising amount of stuff in home good stores is US/Canada/Mexico made. The production of many home goods is a natural fit for developed nations (this is way outside the scope of this comment but they're generally highly automated and clean eroding the two primary advantages of offshoring) and then when you tack shipping on top it makes sense. North America makes a heck of a lot of stuff, it just doesn't employ many people to do it.