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Costco has a higher income cachet, there’s a reason Charlie Munger adored it so. When you’re living in a 100sqft SRO and walking for your groceries the value o

Costco has a higher income cachet, there’s a reason Charlie Munger adored it so. When you’re living in a 100sqft SRO and walking for your groceries the value of the dollar store is more obvious. Because it’s a STORE for the things you can’t fit at home that is near your home, which sells items in small quantities. The entire dollar store model is many locations and small footprint. It doesn’t make a lick of sense for them to take their car (???) and drive over to Costco to buy a 12 pack of paper towels that will be lying around for a year or two because it’s technically cheaper per unit. For all this talk of the poor being exploited I think people grossly underestimate in general how wise the poor is with their money. They don’t have much of it so they have to think hard about how to spend each dollar.

bombcar 3y ago
All that is true, but the dollar stores (perhaps more correctly called convenience stores?) have issues, too. Ours is literally across the street from a Walmart, and many items are priced higher than Walmart for the exact same size. However, one of the best things you can do to save money is identify waste, which sometimes means buying a smaller more expensive (per unit) item than a larger and cheaper per unit one. There's no reason to buy a gallon of milk if you always throw away half.
- faeriechangling 3y ago
  When I’ve been poor and seen this happen, I tended to shop at both stores because some items at the dollar store are actually cheaper. Just like many grocery stores have rotisserie chickens sold under cost, the dollar store has its own anchor items like the balloons. The fact that some items are overpriced is part of the game they’re playing. It’s asking the customer “are you really going to wait in another lineup to save a buck?” It’s also taking advantage of the fact it’s cognitively difficult to memorize the price of each product in both stores, especially because the prices change and the size of products is often different, so it’s easy to get confused and overpay. Yet they aren’t really taking advantage of customers any more than Walmart is when they throw a sale and puts their best value items at the back corner of the store forcing their customers to walk past worse value items. It’s also simply the case that Walmart simply has less overhead and can pass the savings on. Not to mention more negotiating power.
  - bombcar 3y ago
    Yep - there's all sorts of trade offs, and just because one company doesn't do the ones you'd like in that case, doesn't necessarily make them evil. Around here, the cheapest milk by far is a gas station - which is obviously doing it intentionally to anchor them as "the place to get milk on the way home". Other items are way higher priced than a grocery store, and their goal there is to "have it when you want it".

bombcar 3y ago

All that is true, but the dollar stores (perhaps more correctly called convenience stores?) have issues, too. Ours is literally across the street from a Walmart, and many items are priced higher than Walmart for the exact same size. However, one of the best things you can do to save money is identify waste, which sometimes means buying a smaller more expensive (per unit) item than a larger and cheaper per unit one. There's no reason to buy a gallon of milk if you always throw away half.

faeriechangling 3y ago
When I’ve been poor and seen this happen, I tended to shop at both stores because some items at the dollar store are actually cheaper. Just like many grocery stores have rotisserie chickens sold under cost, the dollar store has its own anchor items like the balloons. The fact that some items are overpriced is part of the game they’re playing. It’s asking the customer “are you really going to wait in another lineup to save a buck?” It’s also taking advantage of the fact it’s cognitively difficult to memorize the price of each product in both stores, especially because the prices change and the size of products is often different, so it’s easy to get confused and overpay. Yet they aren’t really taking advantage of customers any more than Walmart is when they throw a sale and puts their best value items at the back corner of the store forcing their customers to walk past worse value items. It’s also simply the case that Walmart simply has less overhead and can pass the savings on. Not to mention more negotiating power.
- bombcar 3y ago
  Yep - there's all sorts of trade offs, and just because one company doesn't do the ones you'd like in that case, doesn't necessarily make them evil. Around here, the cheapest milk by far is a gas station - which is obviously doing it intentionally to anchor them as "the place to get milk on the way home". Other items are way higher priced than a grocery store, and their goal there is to "have it when you want it".