7 ms·

Family Dollar to close almost 1,000 stores

58 points by pg_1234 3y ago

Khelavaster 3y ago
Dollar tree had too many nearby family dollars. They tried to diversify into groceries vs. home goods but that only went so far. I always figured the two were competitors based on how often both stores would be nearby..
- deleted 3y ago
  [deleted]
beezle 3y ago
"Amid higher costs throughout the economy, consumers have begun shifting to lower-margin goods compared with higher spending on discretionary items earlier in the post-pandemic period." If Family Dollar is not lower margin I'm not sure what is. My guess is they have mostly lost out to internet sellers and Walmart.
- al_borland 3y ago
  Historically, dollar stores do better during bad times. I’m wondering if Dollar General is what’s really hurting them. I hear people talk about Dollar General all the time, but almost never Family Dollar. DG seems to be the Walmart of the dollar store game.
  - kerkeslager 3y ago
    Due to rock climbing, I spend a lot of time in poor rural areas (most recently, rural Tennessee). Dollar General has a few things going for them in these areas: 1. They seem to have very low staffing costs. Most stores seem to have at most 2 workers on staff at a given time (obviously this is higher in busier areas). 2. They seem to have no compunction about putting stores in pretty remote locations (example: [1]). This is probably enabled by having low staffing costs--a store doesn't have to make huge revenue if its costs are low. 3. They seem to have a very standard formula for new stores, which allows them to build them quickly. I've seen a flat lot with trees starting to grow in it, go to an open Dollar General in approximately 9 days. I can't imagine what sort of feats of organizational engineering allows that, but it has to be an advantage because it allows them to pivot into an area quickly. And I would imagine the non-descript buildings are fairly easy to sell, allowing them to pivot out of areas quickly as well. 4. Their competition in remote areas is usually gas stations. While DG isn't cheap compared to Walmart or Aldi, they're often about 2/3 the price of gas stations for a lot of items. [1] https://maps.app.goo.gl/3gwxaiNRtgqKiKJ28 https://maps.app.goo.gl/3gwxaiNRtgqKiKJ28
    - bombcar 3y ago
      Everything here is spot on with my experience. They also have little or no perishable items and so stocking becomes simpler, too.
- FredPret 3y ago
  Dollar stores generally have much higher margins than Walmart or Costco. They're more expensive per unit, but the upfront cash required by the customer is lower. For this reason (cashflow) they are seen as a good option for poor people, where in reality everyone would be better served by Costco if they had the cash and storage room to buy in bulk, and a car.
_fat_santa 3y ago
One thing I noticed about Family Dollar anytime I went into one is their prices were not any better than the local grocery store. You walk into DollarTree and it feels like a dollar store, with Family Dollar there were tons of products I saw where I knew it was cheaper at the local grocery store, and not just cheaper where you would buy a bigger item for more but end up paying less for each unit, but 1-1 products that were more expensive than competitors. Now if the store was in a rural area with little competition that would be one thing, but this store was in a city where you could walk across the street to a Kroger.
- qgin 3y ago
  Family Dollar occupies a weird space. The successful stores are in locations where other retailers refuse to go. But they sell dollar store quality stuff at (sometimes higher than) Walmart prices.
pers0n 3y ago
I hope Aldi gets 1,000 stores soon. Ideally I'd like to see 5,000+ Aldis in the US.
- nyjah 3y ago
  Not me. Aldi is crap around me. I live in rural area, it's cheap generally way worse quality and we don't need more cheap crap grocery. I know hating on Aldi is unpopular on the internet, but that's been my experience.
  - cpursley 3y ago
    Aldi has a number of high quality and healthy items. They have great prices for things like nuts, jerky, cheese, etc. Just skip the processed stuff like you should in any grocery store.
    - cpursley 3y ago
      Also, I'm always amused that the same anti-Aldi people seem to love Trader Joes and also be the ones talking about food access, poverty issues, etc.
      - nyjah 3y ago
        I don’t like Trader Joe’s either, to be fair.
- eugenekolo 3y ago
  The love for Aldi must be very regional or personal. Because I walk into them and just see knock off snacks such as chips/poptarts, an aisle of rice and pasta, and an aisle of canned food items, and pretty much nothing else in them.
  - jessepasley 3y ago
    This reminds me of Aldi from about 25 years ago. Today, I buy most of my diet from Aldi: organic berries, grass fed beef, pasture raised chicken and eggs, etc. All are higher quality than other grocery stores, but much cheaper. I'm guessing this must be regional, which is sad.
prirun 3y ago
When they were competitors, before the merger in 2015, they built stores next to each other. Rite Aid did the same thing with Walgreens drug stores. Then after the merger, they ended up with redundant stores in the same location. Duh! https://corporate.dollartree.com/news-media/press-releases/detail/120/dollar-tree-completes-acquisition-of-family-dollar https://corporate.dollartree.com/news-media/press-releases/d... The thing I don't like about these stores is IMO they take advantage of poor people who think they are getting cheaper products, but in many cases, especially for food items, they're paying more. A gallon of milk was $3.50 last time I went to one, whereas it was $1.89 at Meijer. Of course, Meijer does the same thing: if you buy milk at their gas station store, it's also well over $3, but inside the store it's under $2. People trying to save money would be better off shopping at Aldi IMO, because Aldi doesn't have 5000 kinds of orange juice or paper towels. They have one kind and the price is usually reasonable, whereas the large grocery stores play all kinds of games intended to cause people in a hurry or with limited time or ability to compare products, to choose the wrong thing and pay more.
- fires10 3y ago
  Aldi's or another store is often very far away. I go to them because they are close and available. Most of us know they are more expensive. Time and travel need to be taken into account. Nearest grocery store is a minimum of 25 minutes one way. Family Dollar was 5 minutes away.
- abnry 3y ago
  > The thing I don't like about these stores is IMO they take advantage of poor people who think they are getting cheaper products This only makes sense if you think poor people are dumb or naive. They don't know how to compare prices? As other people have mentioned, sometimes the value is the amount you can buy. If your personal financial margins are small, it is okay to spend more per oz on a single bar of soap because it is the difference between having soap vs not. We shouldn't assume cost per unit is the only value a store provides.
  - duxup 3y ago
    >This only makes sense if you think poor people are dumb or naive. I would say ALL consumers are not consistently logical / will make choices that aren't in their best interest.
bonyt 3y ago
A couple of good videos about the business of dollar stores with similar takes: https://www.youtube.com/watch?v=p4QGOHahiVM https://www.youtube.com/watch?v=p4QGOHahiVM (Last Week Tonight with John Oliver) https://www.youtube.com/watch?v=vQpUV--2Jao https://www.youtube.com/watch?v=vQpUV--2Jao (Wendover Productions)
- zeroonetwothree 3y ago
  I'm sympathetic to this view, but ultimately I think it's likely they are providing some benefit (even if their practices aren't 100% ethical) or else consumers wouldn't prefer them so much. I don't like to assume that a huge % of the population is too stupid to make basic choices.
  - bonyt 3y ago
    Honestly, I don't think that assumption is necessary, and I don't think either video suggests it in the slightest.
mattbrewsbytes 3y ago
How is this even remotely Hacker News?
- duxup 3y ago
  I believe the general rule is that if it is interesting... there ya go. HN may often be technology focused, but it isn't a requirement.
  - mattbrewsbytes 3y ago
    I think it should be stricter, focused on startups, technology, and related topics. General business news? Whats next - general political news?
- jeffbee 3y ago
  It is necessary to Garry Tan's dream of disrupting the entire American society for the people to believe that everything about the economy is extremely bad.
- iancmceachern 3y ago
  I find this super interesting. A big part of HN is business
balthasar 3y ago
Family Dollar aggressively lowered the number of employees in their stores leading to disorganized and dirty store locations. It isn't surprising that they are now closing these locations.
mocha_nate 3y ago
What’s the opposite of the Colbert bump? That’s basically what John Oliver did here (Joking of course)
lfmunoz4 3y ago
Anyone notice that dollars stores sell few products that are actually a dollar.
deleted 3y ago
[deleted]
diseasedyak 3y ago
Every Dollar Tree and Family Dollar that I've been in (and this applies to Dollar General as well, here in the southern US) has had 1, maybe 2, employees working and aisles filled with boxes waiting to be unloaded. A couple employees can't contain any sort of theft, much less help customers and unload all the stuff to put on shelves. Little reason to be shocked on why their business model isn't working...
- iancmceachern 3y ago
  They (management) does this deliberately, there are youtube videos on it

58 points by pg_1234 3y ago

Dollar tree had too many nearby family dollars. They tried to diversify into groceries vs. home goods but that only went so far. I always figured the two were competitors based on how often both stores would be nearby..

deleted 3y ago
[deleted]

beezle 3y ago

"Amid higher costs throughout the economy, consumers have begun shifting to lower-margin goods compared with higher spending on discretionary items earlier in the post-pandemic period." If Family Dollar is not lower margin I'm not sure what is. My guess is they have mostly lost out to internet sellers and Walmart.

al_borland 3y ago
Historically, dollar stores do better during bad times. I’m wondering if Dollar General is what’s really hurting them. I hear people talk about Dollar General all the time, but almost never Family Dollar. DG seems to be the Walmart of the dollar store game.
- kerkeslager 3y ago
  Due to rock climbing, I spend a lot of time in poor rural areas (most recently, rural Tennessee). Dollar General has a few things going for them in these areas: 1. They seem to have very low staffing costs. Most stores seem to have at most 2 workers on staff at a given time (obviously this is higher in busier areas). 2. They seem to have no compunction about putting stores in pretty remote locations (example: [1]). This is probably enabled by having low staffing costs--a store doesn't have to make huge revenue if its costs are low. 3. They seem to have a very standard formula for new stores, which allows them to build them quickly. I've seen a flat lot with trees starting to grow in it, go to an open Dollar General in approximately 9 days. I can't imagine what sort of feats of organizational engineering allows that, but it has to be an advantage because it allows them to pivot into an area quickly. And I would imagine the non-descript buildings are fairly easy to sell, allowing them to pivot out of areas quickly as well. 4. Their competition in remote areas is usually gas stations. While DG isn't cheap compared to Walmart or Aldi, they're often about 2/3 the price of gas stations for a lot of items. [1] https://maps.app.goo.gl/3gwxaiNRtgqKiKJ28 https://maps.app.goo.gl/3gwxaiNRtgqKiKJ28
  - bombcar 3y ago
    Everything here is spot on with my experience. They also have little or no perishable items and so stocking becomes simpler, too.
FredPret 3y ago
Dollar stores generally have much higher margins than Walmart or Costco. They're more expensive per unit, but the upfront cash required by the customer is lower. For this reason (cashflow) they are seen as a good option for poor people, where in reality everyone would be better served by Costco if they had the cash and storage room to buy in bulk, and a car.

_fat_santa 3y ago

One thing I noticed about Family Dollar anytime I went into one is their prices were not any better than the local grocery store. You walk into DollarTree and it feels like a dollar store, with Family Dollar there were tons of products I saw where I knew it was cheaper at the local grocery store, and not just cheaper where you would buy a bigger item for more but end up paying less for each unit, but 1-1 products that were more expensive than competitors. Now if the store was in a rural area with little competition that would be one thing, but this store was in a city where you could walk across the street to a Kroger.

qgin 3y ago
Family Dollar occupies a weird space. The successful stores are in locations where other retailers refuse to go. But they sell dollar store quality stuff at (sometimes higher than) Walmart prices.

pers0n 3y ago

I hope Aldi gets 1,000 stores soon. Ideally I'd like to see 5,000+ Aldis in the US.

nyjah 3y ago
Not me. Aldi is crap around me. I live in rural area, it's cheap generally way worse quality and we don't need more cheap crap grocery. I know hating on Aldi is unpopular on the internet, but that's been my experience.
- cpursley 3y ago
  Aldi has a number of high quality and healthy items. They have great prices for things like nuts, jerky, cheese, etc. Just skip the processed stuff like you should in any grocery store.
  - cpursley 3y ago
    Also, I'm always amused that the same anti-Aldi people seem to love Trader Joes and also be the ones talking about food access, poverty issues, etc.
    - nyjah 3y ago
      I don’t like Trader Joe’s either, to be fair.
eugenekolo 3y ago
The love for Aldi must be very regional or personal. Because I walk into them and just see knock off snacks such as chips/poptarts, an aisle of rice and pasta, and an aisle of canned food items, and pretty much nothing else in them.
- jessepasley 3y ago
  This reminds me of Aldi from about 25 years ago. Today, I buy most of my diet from Aldi: organic berries, grass fed beef, pasture raised chicken and eggs, etc. All are higher quality than other grocery stores, but much cheaper. I'm guessing this must be regional, which is sad.

prirun 3y ago

When they were competitors, before the merger in 2015, they built stores next to each other. Rite Aid did the same thing with Walgreens drug stores. Then after the merger, they ended up with redundant stores in the same location. Duh! https://corporate.dollartree.com/news-media/press-releases/detail/120/dollar-tree-completes-acquisition-of-family-dollar https://corporate.dollartree.com/news-media/press-releases/d... The thing I don't like about these stores is IMO they take advantage of poor people who think they are getting cheaper products, but in many cases, especially for food items, they're paying more. A gallon of milk was $3.50 last time I went to one, whereas it was $1.89 at Meijer. Of course, Meijer does the same thing: if you buy milk at their gas station store, it's also well over $3, but inside the store it's under $2. People trying to save money would be better off shopping at Aldi IMO, because Aldi doesn't have 5000 kinds of orange juice or paper towels. They have one kind and the price is usually reasonable, whereas the large grocery stores play all kinds of games intended to cause people in a hurry or with limited time or ability to compare products, to choose the wrong thing and pay more.

fires10 3y ago
Aldi's or another store is often very far away. I go to them because they are close and available. Most of us know they are more expensive. Time and travel need to be taken into account. Nearest grocery store is a minimum of 25 minutes one way. Family Dollar was 5 minutes away.
abnry 3y ago
> The thing I don't like about these stores is IMO they take advantage of poor people who think they are getting cheaper products This only makes sense if you think poor people are dumb or naive. They don't know how to compare prices? As other people have mentioned, sometimes the value is the amount you can buy. If your personal financial margins are small, it is okay to spend more per oz on a single bar of soap because it is the difference between having soap vs not. We shouldn't assume cost per unit is the only value a store provides.
- duxup 3y ago
  >This only makes sense if you think poor people are dumb or naive. I would say ALL consumers are not consistently logical / will make choices that aren't in their best interest.

bonyt 3y ago

A couple of good videos about the business of dollar stores with similar takes: https://www.youtube.com/watch?v=p4QGOHahiVM https://www.youtube.com/watch?v=p4QGOHahiVM (Last Week Tonight with John Oliver) https://www.youtube.com/watch?v=vQpUV--2Jao https://www.youtube.com/watch?v=vQpUV--2Jao (Wendover Productions)

zeroonetwothree 3y ago
I'm sympathetic to this view, but ultimately I think it's likely they are providing some benefit (even if their practices aren't 100% ethical) or else consumers wouldn't prefer them so much. I don't like to assume that a huge % of the population is too stupid to make basic choices.
- bonyt 3y ago
  Honestly, I don't think that assumption is necessary, and I don't think either video suggests it in the slightest.

mattbrewsbytes 3y ago

How is this even remotely Hacker News?

duxup 3y ago
I believe the general rule is that if it is interesting... there ya go. HN may often be technology focused, but it isn't a requirement.
- mattbrewsbytes 3y ago
  I think it should be stricter, focused on startups, technology, and related topics. General business news? Whats next - general political news?
jeffbee 3y ago
It is necessary to Garry Tan's dream of disrupting the entire American society for the people to believe that everything about the economy is extremely bad.
iancmceachern 3y ago
I find this super interesting. A big part of HN is business

balthasar 3y ago

Family Dollar aggressively lowered the number of employees in their stores leading to disorganized and dirty store locations. It isn't surprising that they are now closing these locations.

mocha_nate 3y ago

What’s the opposite of the Colbert bump? That’s basically what John Oliver did here (Joking of course)

lfmunoz4 3y ago

Anyone notice that dollars stores sell few products that are actually a dollar.

deleted 3y ago

[deleted]

diseasedyak 3y ago

Every Dollar Tree and Family Dollar that I've been in (and this applies to Dollar General as well, here in the southern US) has had 1, maybe 2, employees working and aisles filled with boxes waiting to be unloaded. A couple employees can't contain any sort of theft, much less help customers and unload all the stuff to put on shelves. Little reason to be shocked on why their business model isn't working...

iancmceachern 3y ago
They (management) does this deliberately, there are youtube videos on it