Dollar General Hits a Gold Mine in Rural America | Hacker News Reader

Dollar General Hits a Gold Mine in Rural America

bloomberg.com

227 pointstrevin311 comments

Places like this have always been big in rural areas. I'm from Maine, and there's two local chain stores, Reny's and Marden's that have been around for a long time, and have always been stocked with weird brands, consignment stuff, closeout items, and such, and the whole appeal is that it's cheap(er) stuff than you'd usually find, and you never quite know what you might find in stock.

Plus, incredibly terrible local TV commercials

Renys https://www.youtube.com/watch?v=OMNCjsz9ob8

Marden's https://www.youtube.com/watch?v=AZ_iM2jrLGU

Shh! They don't need to know about Reny's. They're finally gone until skiing starts up, except for a few hunters.

There's a Dollar General in Farmington and they always have cars in the parking lot. I've never been in there but they appear busy. There's another one over in the mall thing, across from Burger King.

Also, Big Al's. I've been in there. They have the strangest of stuff, almost. Marden's is a bit stranger.

Haha, I never imagined I'd find somebody on HN that knew where Farmington was, except as the last vestiges of civilization before they hit Sugarloaf...

Also home to the cheapest, and best movie theater I've ever been to. Still has $4 matinees, the last time I was up to visit my folks.

I know the owner of the theater. I'm up past Rangeley, in unincorporated township territory.

You're the only other Mainer I've seen on HN and I'm 'from away.' Yes, I live here by choice. I retired here.

I don't want to derail the thread or meander off topic.if you want, uninvolved@outlook.com will get seen and replied to.

> only other mainer

I only lived there when I was a kid (extended family lives there too), so I don't know if I can call myself a Mainer.

Maine has a serious brain drain issue, though I suppose we've begun to digress too far for HN standards. dang is gonna come yell at me.

formerly of Lisbon Falls (for HS ~15-20 years ago)!

I f*cking love Moxie.

Nobody but you will understand the significance of that comment, unless they Google.

I do. Moxie is awful though, I don't care what Ted Williams says.

You know about the Moxie Festival?!?

It's technically in Lisbon Falls, which is just down around the corner.

I grew up on the other side of Lewiston. =)

I'll be damned! It really is a Mainah convention.

I have like a dozen Moxie shirts. Man, the poor village people had to put up with me moving in. I used to drink - a lot.

But, we've come to grips with each other. It was so different than I'd expected. I do love it here. It's home. It's the only hometown I've ever had.

And it is awesome. The people crack me up. I've even got the accent figured out.

That's an interesting way to think about it--I moved away because there's no work and I don't really ever want to own a car again. I miss parts of it. It's a nice place. (I grew up in Casco, went to high school in Naples, and one of my biggest clients right now--their lead devops guy went to my high school a decade before me!)

But as a community, it troubles me. But...it's a sand trap. I wish it were otherwise.

I'd absolutely not recommend young people move here, unless they want something just plain middle class and hard work. To live here and truly enjoy it as I do, really takes a great deal of money.

I'm also in the Portland area (first time I'm able to say that without having to include the state) and grew up here. Also haven't come across another HNer.

I know it's the second most rural state, but the Portland area seems urban enough to offer a variety of places to purchase food, so I don't completely understand how so many Dollar stores seem to thrive here especially with a Walmart nearby.

I've only been going up to Rangely for the past few years, and I've always wondered what type of store there was before IGA, because it doesn't seem to cater to a low income crowd like dollar stores in general.

I've never had an encounter with dang but hopefully dang won't be too harsh, this is just too special of an occasion.

You live in the big city! My town name consists of a single letter and has six residencies. I'm out past Rangeley.

Rangeley has a buttload of money. There are some poor, but not many. They only have 1200 residents, or so. However, they can swell to ten times that size during tourist season. They love them some tourists.

And, yeah, this is a definite rarity. I've browsed for years, joined almost two years ago, kept lurking to get the feel if things, and just started posting a few months ago.

I have no idea what was there before the IGA. I suspect that building has always been an IGA and has been since the 60s. That's going by the architecture internally.

There are an insane number of places to eat and the community is doing something all the time. I can live anywhere in the planet, for the most part. I live here.

It's a downright Mainah convention! I'm accepted as a native, but I came here to go to boarding/prep school as a kid. Kents Hill, no apostrophe. I'm quite partial to the lifestyle and people.

I should be quieter. People will start moving here.

Funniest bumper sticker ever: Welcome to Maine; Now go Home!

It's been an IGA as long as it's been there, I think. I think I remember it being built, or maybe expanded, but that was way back when I was a kid and my Dad was cutting wood for DC Mortons - their garage was where Boss Power Equipment is now.

I bought a substantial (obscene really) amount of land that had been owned by a paper mill. It hadn't been harvested since the 80s and it's a working forest (TSI, sustainable) now. I know how it's done, have the gear, and can log safely - I just can't do it at the speeds they do it at.

These days, there's little logging left. They still have the festivals with the demonstrations and competitions, though.

The lumber quality wood from my land goes to turning and some specialty mills - some goes down to Belgrade (Hammond). Over in Vienna, I've got a bunch of commercial blueberry fields, about 400 acres.

So, I've tried to fit in and the natives accept me as one of their own. I still call them the Village People, though.

You can tell when they've accepted you. The gossip is no longer about you - and now they tell you gossip about the new people. I moved here after selling my business and built a giant house.

The locals would come sit in my future driveway and talk about me. Sometimes, they'd spend the whole day there. So, I made it a point to hire anyone who asked. That worked wonders.

I paid people to teach me how to hunt, fish, use a chainsaw, process meat, preserve things, grow a garden, etc...

It's been VERY different than what I'd expected when I opted to move here. It's been much better, actually. It's the first place I've ever called home - which might explain my gushing about it.

Just out of curiosity, how did you find out about HN?

Someone linked me because they thought I'd be interested. I'm a retired mathematician, hackerish, and investor.

"Most rural", interesting. I haven't found the rank but I see VT is #1 "most rural" which I assume is % living in areas considered 'rural'. Surprising to me, as I certainly don't consider it to be a sparsely populated state-- and in fact, it's the 38th most densely populated state, between Colorado and Oregon. Fascinating.

My favorite Maine tale is about the obituary of Mary, a 103 year old woman who died in a small town in Maine. She moved there when she was three weeks old and spent her entire life living in the house on the small farm that she grew up on. She went to the local school, graduated and started teaching then later got married and had a family and eventually grandchildren and great-grandchildren. Her obituary lead with "Mary, from away, ...".

I am accepted as a native but always will be from away. I can hunt, fish, twitch logs, drive a tractor, plow snow, and spit. I know the woods and roads better than most natives.

But, I'm from away.

$4 showings? That's unbelievable.

Narrow Gauge, in Farmington, Maine. You can also buy tickets in bulk for $4.00 and they include soda and popcorn. It's over behind the bar, near the health food store.

There's one in milbridge that has 3$ movies, and before each show an old man comes up and loads a reel into a player piano, and then you listen to some ragtime tune before the movie starts. No joke! It's famous.

Good old Farmington, but I'm actually in the midcoast, which is a world apart from central and northern Maine.

I just noticed your comment.

It is amazing how different the regions of Maine are. I'm in NW Maine, which isn't like it is up in the county, nor the mid coast, down east, southern, central, or even western.

I'm more Jackman and less Bethel, but the village is more Bethel and less Jackman. It used to be a bit more Bethel, but the ski slope needed money to replace the lifts and they are now shut down.

So, just in this one State, it is a lot of variation.

I can't parse this:

"They're finally gone until skiing starts up, except for a few hunters."

I gather it has something to do with number of customers but I'm not sure how it benefits someone that a store gets FEWER shoppers.

Oh, it doesn't benefit the stores. It removes them from our roads and stores for a short while. During tourist season, we get up to 10x the population which is not something it's really designed for. It's pretty good money for the locals, they are well adapted to the breaks.

The foliage peepers, with tour buses and whatever, have finally gone home. Almost without fail I get a whole bus driving up my driveway because their GPS insists it is a road.

I don't mind, actually. Our local sport is making fun of tourists. We all go down to the boat landing on Memorial Day. You can watch them wreck $80,000 worth of boat, trailer, and truck. We don't get much amusement, otherwise.

If tourism stopped, the town would be dead. They milk them for all they are worth. Locals just go to Farmington where things are often about half the price.

So, no... It doesn't help the stors but it gets used to give a quick break and prepare for the winter rush. There are still tourists, but not as many. It's a tourist area, pretty much exclusively, all year long. Skiing, hunting, hiking, climbing, fishing, boating, swimming, camping, etc...

Oh, I see, "they" was just about tourists in general, not specific to shoppers at that store.

As a west coaster visiting New England for the first time this past summer, it really stuck me how serious the crush of tourists must be for places like small town Maine (made it as far up the coast as Acadia NP). The overwhelming number of shops, of american flags, of lobster rolls, of store advertising Yeti coolers for sale.. it was just 10x what we see in small towns in the west.

No matter where you go, of course, tourist town folk make fun of tourists but I think the crush must be much worse up your way, where small town life here, even for those of us who live in heavily populated areas, isn't quite as novel. It makes sense, though, given the massive population of the east coast. I remember once being angry about how everything is always advertised eastern-time-centric, and pulled up a map to try to make the argument that not THAT many people live in the Eastern time zone, but then realized it's almost 50% of the entire country...

http://kurtostergaard.com/us-population-by-time-zone/

Yeah, I was responding to someone who'd know which they I meant. My bad.

I live outside of the tourist area, I'm really remote. But, the village is a tourist area. They go from 1200 to 12000 people at times.

There are camps and parks to accommodate them, hotels, and things like that. They have municipal services, which I do not have.

Also, that's the nearest village for me. It's the only group of people for miles. I suspect a dollar store would do well, actually.

For a sense of scale, roughly 5,000 live on my peninsula between the towns. The summer populations is probably about 10x that plus any weekend visitors.

It makes it really hard for restaurants to stay open during the off season, and even the Hannaford's market can't be sized right. It's a bit big for the population right now, but it feels like Black Friday on weekends during the summer.

The towns have been working to bring more off season events to even things out, but most aren't working (the one notable exception brought in 160,000ish customers in it's second 6 week run).

Aren't you surprised how negatively you think of a whole class of people? Isn't this attitude the same human instinct and no less harmful than racism, sexism, etc? Tourists aren't a socially or legally protected class so you don't have to worry about publicly mocking them, but they're still a class of innocent humans.

Nope, not even remotely surprised.

It is pretty much entirely jest. Most tourists are fantastic, though they often try things they aren't experienced or equipped for. This results in them dying in new and interesting ways.

I'm on the volunteer rescue squad and go out fetching bodies, ideally still alive, on a regular basis. They get lost, try kayaking during flood season, snowmobile on thin ice - including trying to do it over open water, get drunk and use an ATV until they are impaled on a pine tree, and try to back their boats into the water - which is expensive but funny as hell to watch.

So, some of the complaints are valid. You should see them drive in the snow. Fortunately, there are usually giant snow banks so they don't get too hurt. I drive around and pull people out of the ditches, just for fun. I don't charge them, I just enjoy it.

But, yeah, they seem to appreciate the ribbing. If they have issues, we will all stop what we are doing and go out and rescue them. I've rappelled down over the falls to retrieve a kayaker. I even went back to get their kayak. We don't charge them any money, we just give them a ration of crap and tell them to take a few classes before trying that again.

Edit to add: If you're from MA, we make fun of you the most.

Edit again: I just noticed AutoCorrect hates me.

You're now making fun of people dying. That's pretty horrible. Isn't it the same as laughing at handicapped people trying to get on the bus too? They should do more training before venturing out into the real world. Isn't that the same as making fun of alcoholics and drug addicts who kill themselves with their habits? Suicide and drug overdose deaths are a joke and the people who die deserve it because they didn't bother to learn useful employable skills and ended up feeling worthless? Just because someone isn't good at evaluating risk doesn't mean they deserve ridicule for suffering all kinds of loss from their pride to their car, to their life.

Edit: I got derailed from my point. Not all tourists are what your stereotype says. Just like not all women drivers cause traffic jams and not all blacks are criminals. This is the prejudice you're showing that I think is equivalent to racism or sexism. Imagine replacing "tourist" with "black" in your thoughts to see how extreme it is.

Oh, we take deaths seriously. We take serious injuries seriously. We will laugh when you crush your boat, trailer, and truck because you can't follow directions.

Really, backing up a trailer is very easy if you just follow the directions. Basically, aim the truck. Put both hands on the steering wheel, at ten and two. Go backwards slowly. Look in your mirrors. If the boat is bigger in one mirror, turn that direction. Tada!

You've obviously never seen many tourists in the wild, or were one.

We take good care of them. We want them to come back. But, we live in an area where you will die a horrible and gruesome death if you don't follow directions. Yet, many fail to follow directions.

Most of their risk is pretty harmless. Our biggest rescue this year was 28 campers who somehow got completely lost on a nature hike. We had two snowmobiles in the lake, a car in the lake, a kid who drowned under the ice, and a few ATV accidents. Then there are all the smaller mishaps which require a 45 minute drive to an ER.

This might help... I live 1h 15m from a fast food joint - if the roads are clear. You will die here - really. They do it all the time. They do it because they don't follow directions.

Now, if you read my reply again, you'll note that they aren't the majority. The majority still screw up traffic, scare the animals, feed the bears, and generally get drunk and smash into stuff. Not too long ago, a nice lady tried to pet a bull moose in rutting season. She spent a while in the hospital but she lived.

When I risk my life to come save you from a situation you stupidly put yourself into, and then I laugh at you, you can be pissed or grateful. That is up to you. I find they are usually embarrassed and grateful.

By the way, is this response you're giving what the trendy kids are calling 'virtue signaling?' If it helps, you're gonna change my mind exactly zero. I'm not even remotely concerned that it is unethical. If you want to avoid it, don't make us have to clean up after you. You're full of nasty bits that are hard to clean off.

My concern is that most of society seems to have accepted that popular "isms" are bad, but only the officially designated ones. Then they're free to be as offensive as they like to any other groups of people. You're able to publicly say the things you did without causing any outrage. Yet if you do the same about protected classes, it's socially unacceptable. This shows that followers of the culture don't actually have concern for people being insulted, they just pretend to be concerned when they know everyone will agree with them. That's virtue signalling which I see as hypocritical.

I understand that you help people when they have problems. I don't think that makes is OK to insult them though. It's easy to be frustrated when people repeatedly don't do what you tell them, and feel smugness when they suffer the consequences. To pull out another analogy, we don't mock victims of industrial accidents for failing to follow the safety rules 100% of the time, despite being told those rules. Instead, we look for ways to make it harder to suffer the accidents.

Don't forget that just about every problem that people suffer is somehow due to their own actions. Life's full of rules you're supposed to follow but nobody can reliable follow them all the time, and if you did, you'd surely not get far or have much fun. People everywhere still crash their cars, turn up to work late, get preventable diseases, etc. I think it's offensive to blame them for their suffering.

You'll get over it.

I hope not. This arbitrary distinction between people you're allowed to laugh at and people you're not is just assholes pretending to be nice people by following the popular culture. You're not doing that, but you can see here on this thread someone complaining that I wasn't supportive enough of the suffering of alcoholics. Who would have guessed they had to be respected but adventure tourists didn't?

Anyway, don't reply because I think you're just here to release your frustrations without understanding things. You've used brags and personal insults which show that you want to engage in an argument but you don't have anything constructive to say.

Here in Austria (no not the one with kangaroos, that's Australia ;-) We frequently have tourists that require to be rescued in our mountainous areas (which is kind of hard because tourism is so well developed) because they think that going hiking in the Alps is the same as going for a stroll in the park. Climbing a mountain in flip-flops is not sane!

So I know exactly what you are talking about.

In Australia (where the snakes are far less friendly than they are in Austria), Austrian and German tourists often have to be rescued from remote areas, beaches, deserts etc. for precisely the same reason: they thought they could do it in flip-flops.

(Disclaimer: am Australian, living in Austria, and if I hear that stupid joke one more time I'm gonna start throwing snakes at people. The friendly kind, y'know .. Austrians.)

Yeah, as I mentioned above, I own a lot of land. It is all open for public use, except a small portion around my house. I finally had signs made up and an extra phone line installed so that people can call and leave a message saying when and where they went in and when they will be back out.

So far, none have died on my property but two have died really close to it. Some snowmobile and ATV injuries have happened. A bunch have gotten lost.

I'm always amused when someone has a cell phone and still gets lost. They will point out that they had no cell service. I've figured out how to open the mapping application on all the devices so that I can show them.

We give away trail maps. They are free. We have plenty, take two. Hell, if you want, I'll even show you how to do most of the activities safely. I have all the gear, just ask.

But no... They think watching Mission Imposeible means they are experirienced rock climbers.

You should see them hunt. Firearms and tourists are sometimes a bad mix. That usually kills a few people.

I think there might be a cultural difference here. Where are you from? I have maritime family and my uncle has been awarded his village's "Biggest Asshole" award multiple times. With a trophy and everything. He's a potato farmer who listens to classical music and reads poetry while on the machinery. He's got a laugh that lights up a room and is wonderful family man with strong values. He's deeply committed to his community in a spiritual sort of belonging way. He farms the family homestead like 7 generations of Welsh goofballs before him.

Maybe another way to look at it is ask, what is the alternative to having a laugh at the tourists? I can't comprehend one.

Calling each other out for riffing on tourist blunders because they are part of a pseudo-disabled population or something? I'm honestly finding it impossible to imagine a different way for it all to play out.

> handicapped people, alcoholics, drug addicts, and suicidal people

Not even a remotely fair comparison. The vast majority of those groups are affected by negative (horrible) external circumstances: physical or mental conditions, histories of trauma, and awful circumstances are incredibly common among those groups.

Tourists are embarking upon something for enjoyment while of sound mind and (sometimes) body. Ridicule is one of many important ways to help correct (and, as someone helping, cope with) the damage these folks do to themselves and others. It might not be the best way, but it's a far cry from making fun of someone for being on the wrong end of circumstance.

Seriously. You just compared tourists to alcoholics and suicidal people. You're either accidentally supporting GP's point or you should be ashamed of yourself, or both.

I think alcoholics do drink to make themselves feel better. Yes, I'm comparing them.

Well, look at that. Another Mainer on a SAR team on here.

2 sympathy hikes, a couple of Baxter coverage weekends, and ringleading at the MASAR conference so far this year for business.

Grocery Outlet is a grocery store variant that is in the SF Bay Area. It is one of the stores I miss after relocating away.

There are also dollar generals in the area -- maybe not in the bay area proper, but in the same kinds of areas I see Grocery Outlet -- Eg, central valley and foothills of the Sierra.

Not just the Bay Area; they're all over the West Coast + Nevada and Idaho (and also in Pennsylvania for some reason).

Mardens is awesome. It's like a cross between Ocean State Job lot and a government surplus auction with some furniture and home goods thrown in. I love when they have hardware by the pound. Last time I was there they had copper fittings at ~double scrap price. They also had nuts and bolts that looked like they were on the container that got dropped in the harbor but still well worth the price.

Not that it's Maine specific, but Ocean State Job Lot is a weird f-ing place, too. I actually love it, and was in there the other day opining to my wife that were the zombie apocalypse to go down, OSJL would be a solid place to hole up, if you could get some barricades in front of the big sliding glass doors.

I just bought some shampoo there for dirt cheap and when I got home realized all the copy on the bottle was in Czech ;)

Wow, the Maine accent in that Marden's commercial is thick enough to spread on a slice of bread.

If Steven Spielberg had to make a cheesy commercial with an unlimited budget -- he couldn't come close to making such a master piece.

Renys https://www.youtube.com/watch?v=OMNCjsz9ob8

Shoulda bought it when I saw it at mardens!

Good to see we have some mainers on HN! I'm from Ellsworth, now living in Portland. My family's been in the state for several generations, I'm descended from backwoods poachers and liquor runners, so I get to say I'm not from away..

> “You rascals!” Tharp remembers telling the executive who called to deliver the news. “You come to these small towns, and you build these stores, and you cause all the mom and pops to close down, and now you’re the only ones left standing, and you want to go home? Why would you do that to our community?”

"Rascals." I'm not sure I'd be so polite, if I were mayor. The cycle that Bob describes is practically rote tradition by this point, but that doesn't make it any less frustrating or audaciously malicious.

> I'm not sure I'd be so polite, if I were mayor.

He was that polite because all the shops closed down before Walmart got there. The article glosses over the timeline (since it doesn't fit the narrative), but that's how it seemed to me reading between the lines.

The heyday of this place was 100 years ago, by 1962 there was only 1 store left - it has not gotten better since then.

As best as I can tell the Walmart opened at the location of the closed "Decatur Discount", they did not cause it (or the other stores) to close.

I'm not sure where you're getting your information from, but the town has seen linear(albeit slow) consistent growth from 1900 to today, and has seen most of it's growth within the last 30 years.

TFA itself refers to the fact that like every other agricultural community in the central and mountain timezones, the portion of the community outside city limits (i.e. most of it) has been shrinking since 1900. Don't imagine that finding town populations on wiki is some sort of revelation.

I didn't understand why he said that at all- from the article "For the first time in a decade, the 1,788 residents could buy groceries in town." So it sounds like there weren't any mom and pop shops for Walmart to "cause" to close down.

I'm sure there are other kinds of stores wal-mart could push out though.

Sure and they all pay even lower wages than Walmart and employ few people.

I grew up in one of these types of locations. There was absolutely nothing glorious about the Mom & Pop stores that employed few people, paid crap wages and offered zero benefits at all (because they all made little money, couldn't afford to purchase in volume (margins), and were always drifting on the edge of going out of business).

Since Walmart showed up there, wages are up over 50% in ~20 years. Walmart absorbed all the perpetual under-employment in the low skill pool, along with teenagers and retired elderly. It helped set a base income for the entire population by altering the local economy.

> audaciously malicious

malicious: characterized by malice; intending or intended to do harm

I worked in the WMT home office for 12 years.

I can assure you that it's not malice. It's much worse.

During the glory days of growth in the early 2000s, where we were opening a new store (minimum 150,000 square feet, usually much later), on average, every day, the feeling was nothing more or nothing less than complete apathy toward the dollar stores.

WalMart, back then, cared as much about dollar stores as most people care about some ants running across their sidewalk.

Though, as we now see, that was a short-sighted perspective, since WMT, while still enormous, is seeing its growth slowing rapidly.

Apathy isn't worse than malice.

Two Dollar General stores separated by a mile popped up in my hometown in northern California, a place that can barely support two of any stores even grocery stores. Dollar General stores are expensive and nearly always empty. When I lived in the south eight years ago, Dollar General stores were expensive and empty too. I would not be surprised at some point if the economics of their expansion didn't make sense.

As someone else mentioned, Dollar Tree is different. There is a Dollar Tree that is always packed next to an empty Dollar General in my hometown. Dollar Tree is a deep discount store. Dollar General is a convenience store without gas.

Dollar General is like Krispy Kreme was year ago. They are in hyper growth building stores everywhere. Stores like what you describe get lost in the growth.

If the company is successful, it will know that and it will purge the lousy stores. Otherwise, they’ll implode when the interest rates go up and they can’t borrow money anymore.

Interest rates are the last thing Dollar General needs to worry about at this point.

$1.2 billion in profit on $22 billion in sales. They have $2.6 billion in long-term debt, paying ~$100m in annual interest on their total debt.

They could afford a 15% interest rate on their debt.

With their income, they have no need to borrow to build out stores. Their dividend is modest, so that's also no concern vs their need to spend to build.

Dollar General is a refinement of Ray Kroc’s McDonalds model for passive investors. Their magic is net leasing in shitty areas with barebones stores, so they don’t hold many obligations on their balance sheet, and don’t spend a lot on building upkeep and taxes. It is basically a ground lease and a bond alternative.

That works because it’s an investment that lets passive investors yield 5-7%, which is a good yield from a company with a good credit rating.

As rates rise, it gets less and less attractive, especially as leases start maturing, growth slows, and you need to put capital dollars into cheap buildings that you don’t own. It’s not a bad company, but it’s no Walmart.

Earlier this year on vacation in Florida I recalled seeing a Dollar General right behind a Dollar Tree in Haines City. The Dollar General is closed and property for sale. The Dollar Tree was open. Both are across the street from Walmart.

https://www.google.com/maps/@28.1248173,-81.6377691,3a,87.1y...

To see Walmart turn 180 degrees.

Dollar General is a real estate holding company.

If it could only be as successful as McDonald's in that pursuit.

There are 2 just a couple of miles apart in Pine Grove, CA, too. Very small foothills community. Odd.

Dollar General has amazing logistics end-to-end, possibly better than Walmart. Clearly the difference is enough to make them profitable, if barely, in circumstances Walmart isn't.

What's new information for me is that DG can make things work in tiny towns that only support a single store. A lot of what I've read about their strengths in the past had to do with how well they manage multiple stores in one city.

The cost to setup a dollar general has to be 1/100th of the cost of a walmart store.

Are they franchises or company owned?

Article says 15m to start a new Supercenter, 250k for a DG

In my hometown, Wal-Mart left years ago and now there are 5 DG stores within a 5 mile radius. The town only has 5000 people or so. All of those stores stay busy.

Another strength is that the stores just simply aren't that big. I've been to Wal-Marts in rural parts of the lower Midwest that are simply too huge for the population density. Somehow they manage to stay open, but I am never entirely sure how. DG, on the other hand, tends to be half to a third of the size and does very well on the basis that they pretty much only sell stuff that people are actually gonna need on a regular basis. Combine that with the logistics you mentioned, and it's bound to be able to at least sustain itself.

I guess since the land is cheap and they built the building they operate out the operating cost isn't much higher like it would be were they renting space in a developed urban area. Plus it is like they are investing in the real estate as I've seen a few small towns grow a lot in population after Walmart moved in.

Enormous TIF subsidies, mostly.

TIFs are so evil. I avoid stores so sited (and their ~25% "tax") when I can, but their very existence harms the credit of every county and most municipalities I know. They don't even perform their supposed role of restoring "depressed" areas, because a third of them are out in the country and another third just replace one profitable business with another (with a ~3 year interim of nothing at all on the site while the lawyers and lobbyists do their evil shit). The whole phenomenon is just a scheme for zoning boards etc. to enjoy corruption.

https://en.wikipedia.org/wiki/Tax_increment_financing for those who are not familiar with TIF.

Its the last vestige of industry in small town america, it seems. Wonder what happens when it, too, goes away.

Wal-Mart has tended to understaff its stores. Results are dirtier, messier, more crime-friendly stores. They've off-loaded their security/loss prevention expenses on to local police departments: https://www.bloomberg.com/features/2016-walmart-crime/

As an aside, it both saddens and surprises me that we don't hesitate twice when buying the cheap stuff (made abroad, of course) but also complain that all the jobs have left.

It's certainly not a small town, blue-collar occupation issue but it does affect them disproportionately.

This recent NYTimes piece was an eye-opening read for me in that regard. [https://www.nytimes.com/2017/10/14/us/union-jobs-mexico-rexn.... Not that I didn't know this but to have it be made so vivid, it was hard to digest stuff.

I'm not even sure if there's a good solution in sight. Basic income and all that is fine but people still need to be and feel productive and busy for us to stay a sane society.

I haven't read the article, but just clicked on it -- she was featured on today's NYTimes podcast The Daily.

It's hard to buy better stuff when you can't find work that pays enough for it. The problem is bigger than the purchasing decisions individuals make.

People can't buy better stuff because they don't have jobs or jobs that pay well enough. Those jobs leaving are what helps them buy the cheaper stuff. Quite the roundabout, isn't it?

It’s more like a spigot that is draining into corporate coffers, and out of the communities. There’s not much money left and what does move around all doesn’t stay in or anywhere near town.

To be fair, even local mom and pop stores still purchased the majority of the supplies they sold from out of town. Few cities could produce all of the goods, or even the majority of the goods needed on their own. So yes, DG takes some of the profits, but there are local employees making money to then spend in the local economy.

There is lots of reasons to not buy better stuff.

I own mostly cheap furniture because good stuff is a very expensive commitment, for example.

Yup, this is a problem of money draining from rural america. There are many symptoms.

hmm..but stores that make 'cheap stuff' (walmart, mcdonalds, target, etc.) employ a lot of people. The jobs may not pay much but it's employment nonetheless.

They don't employ as many people per dollar of goods sold as the businesses they replaced. It's why those businesses got replaced.

That was an incredibly good read, thank you.

>we don't hesitate twice when buying the cheap stuff

When things like gas and international trade are heavily subsidized (either directly or indirectly using preferential trade agreements) we create a world where this is the norm. When this is the local maxima of capital growth in these areas, this is where capital will invest.

There is at least one very good solution.

Significantly increasing the earned income tax credit.

Warren Buffett has been pushing this for a long time as a superior alternative to increasing the minimum wage. We can push to $15 / hour equivalent without punishing businesses that can't afford the minimum wage at that level. Few people on either side are listening to him however; Democrats in Congress are mindlessly latched onto the minimum wage as the only solution, and Republicans dislike expanding such benefits in general. It can be done without changing much about how the system works and it would immediately begin boosting the standard of living for the bottom 1/2 of workers. The EITC is superior to the universal basic income, as it doesn't needlessly give money to the well-off (ie it isn't inherently regressive) and the US could actually implement a higher and broader EITC system immediately.

https://www.wsj.com/articles/better-than-raising-the-minimum...

I think the issue with this is that the average voter won't understand what it is.

There's nothing inherently regressive about a universal income. Taxing everybody the same percentage is considered regressive because of the diminishing marginal value of each dollar. Rich people are taxed a lower percentage when measured by utility. By the same argument, giving everybody the same basic income is progressive.

There's nothing inherently regressive about a universal income

Except that universal incomes are basically adult allowances provided by Daddy Government. So they are regressive in the sense that they're an idealistic childhood notion that immature adults keep trying to carry forward into adulthood.

That's not how the word is commonly used. By your definition all taxation is regressive.

Read up on what the word regressive means in this context before going off on your anti gub'ment rant

Why is that notion immature? Or idealistic?

"Because that's the way it has always been" doesn't satisfy. The same was true for a whole lot of things throughout history that suddenly . . . weren't.

If you earn $2k, $2000 is 100% of your income. If you earn $20k, $2000 is 10% of your income. If you earn $200K, $2000 1% of your income.

This is why [head taxes](https://en.wikipedia.org/wiki/Poll_tax) are the textbook example of regressive taxation.

And it's why giving out a UBI [a head rebate?] is inherently & unambiguously progressive.

EITC is more complicated.

By nature of being a tax credit, any EITC must phase in as taxable income increases. In the current system, you get more money from the EITC if you earn $16K than if you earn $10K. The more you expand it, the larger the phase-in section needs to be.

The current system also phases out with higher income levels, so if you earn $200K, you're won't get anything from the EITC. This makes it 'more progressive' than UBI, when considered in isolation for the appropriate income range.

But this aspect of the EITC is already in the machinery for income tax. The phase out window roughly corresponds to moving the 25% tax threshold half-way into the 15% one.

A UBI wouldn't be implemented without a change to income tax, and most advocates would largely pay for UBI with additional income taxes.

At the lowest income levels, a system with a UBI is by definition more progressive than one with an EITC. Everything else is up to the implementation.

There's been a good solution in sight for years. Barak Obama campaigned in the primaries on a platform of renegotiating NAFTA. Then he dropped that issue during the general. Trump sang that tune all the way to the White House.

Here's the long story about what's wrong with NAFTA and it's mostly about tax structure. In Mexico they have a VAT sales tax. This is a huge chunk of their federal budget. Most of the taxes are on the consumption side (point of sale), not the production side. Goods produced in Mexico but sold abroad avoid the VAT tax. However, goods produced outside Mexico but sold in Mexico get the same VAT tax as every other good sold. Now let's look at the US. We have no federal sales tax, all of our taxes are on the production side. Every good that leaves a factory has its price loaded up with basically all of our tax costs. It's the production side that's taxed, not the consumption. That means a product manufactured in the US already is loaded up with US taxes, and then gets shipped to Mexico where the VAT is added on top. Double-taxation. Goods produced in Mexico have no VAT, come to the US tariff free, and sold to US consumers where no federal tax is collected on the consumption end. No-tax. You don't need a Ph.D. in Economics to understand what the result of this will be over time.

The way I see it there's two potential solutions to this. One is to renegotiate NAFTA just like we elected Obama and Trump to do. Another would be to restructure our taxes to be more like Mexico and load the taxes on consumption rather than production. This was the signature campaign idea by Herman Cain during the 2012 election with his 9-9-9 plan, though he was laughed at at the time. https://en.wikipedia.org/wiki/9%E2%80%939%E2%80%939_Plan. I'm not suggesting that the 9-9-9 plan exactly is good, but only use it to point out that these solutions have been discussed in the mainstream. I remember Ross Perot's entire campaign against Bill Clinton in 1992 was about how much NAFTA would suck all our jobs to Mexico. But we elected Clinton anyways and look what happened.

That's untrue; the exchange rate adjust to completely negate the tax differences. What economists call the "terms of trade" are not impacted by sales tax.

This gets brought up and debunked periodically, the first result Google returns for me is http://www.aei.org/publication/keynes-at-the-border/ which looks as good as any.

> You don't need a Ph.D. in Economics to understand what the result of this will be over time.

True enough, but it can still be a little confusing, as you've discovered. :)

The discussion isn't about boosting GDP, but about where manufacturing labor takes place. The millions of people in the rust belt who are suffering don't care if them being out of work means a wealthy person in Silicon Valley can sell a few more ads overseas because exports eventually matches imports.

Yes, but I don't think you understand my point:

Mexico having a VAT does not do this. The US not having a VAT does not do this. The results of the US adding a VAT would not do this. VATs do not work the way you think they do.

> The discussion isn't about boosting GDP, but about where manufacturing labor takes place.

Where manufacturing labor takes place is not impacted by who does and does not have a VAT.

Jobs eventually wind up where it's economically efficient for those jobs to be. Are you implying that tax and trade policy have no impact on economic efficiency?

That’s not entirely clear. Certainly even in the US it’s more “efficient” if tech were anywhere but SF, but that’s not the case. Trade happens when countries agree to it, according to local taxes imposed, etc. China and Mexico did not have the manufacturing might they do now before trade deals allowed that flow, combined with a cultural trend in management to “outsource” everything and local in China and Mexico strategy to be that source (by doing things like heavily subsidizing energy, shipping, etc.)

There are lots of economic factors that make SF the most efficient place to open an office, cheap land and labor are not those reasons.

Yes, we're in agreement that China and Mexico have benefitted from our trade policies at the expense of millions of Americans losing their high paying union jobs where they had a stake in the value of production. Of course the financiers on Wall Street were happy to send those good jobs to desperate people in poorer countries. But maybe we could find a better balance between benefitting Wall Street and benefitting Main Street.

> Are you implying that tax and trade policy have no impact on economic efficiency?

Quite the reverse. A VAT is an efficient tax, and in particular is more efficient than income or capital taxes with lower deadweight losses. And in fact, if the US reduced capitals gains and corporate tax rates, and introduced a VAT, keeping its total tax take the same, I'd expect the US to become more economically efficient and employment to rise. (...not that I'd expect the US to introduce a VAT in this way of course.)

But that's neither here nor there. Your original comment was about international trade, trade deficits, and NAFTA, and none of it is true. A VAT does not subsidize exports, nor penalize imports, and 0% of the US balance of trade can be explained by its decision to not have a VAT, or the decision of many of its trading partners to have a VAT. If you want to argue that US economic policy is wrong headed and costing jobs then...yeah, it is. And a VAT is probably a key step on the path towards making major improvements. But that's got nothing to do with NAFTA.

What does efficiency in tax mean?

VAT is regressive imho, because poorer people are affected by it more then richer people (in which you'd have to set up exemptions for food etc to balance it back). Capital gains tax ought to be the heaviest, wage tax ought to be the lowest, do that tax burden is held by those most able to hold it with out loss of quality of life.

> What does efficiency in tax mean?

In this context of optimal tax theory, it'd be referring to the "deadweight loss" of the tax (how much economic activity is reduced per dollar of revenue), and to how much it distorts behaviour. (When viewed another way, it's a measure of how easy the tax is to dodge.) Generally speaking, land taxes are the most efficient, followed by consumption taxes, income taxes, and finally taxes on capital are the most distorting.

> VAT is regressive imho

Correct. However as a general rule income redistribution is achieved much more effectively via spending than taxation. The most efficient, effective welfare states have relatively regressive taxes skewed towards consumption taxes (which as above are efficient and hard to dodge), and then use the revenue to fund programs targeted at the poor. By contrast the US uses very progressive taxes to fund programs largely targeted at the middle class. Empirically, this model doesn't work very well. :)

> Capital gains tax ought to be the heaviest

Capital gains is the least effective tax. It distorts behaviour, has high deadweight taxes, is the easiest tax to dodge, the economic burden is seldom felt by the intended targets. It's not good at redistributing income, and it's not good at raising revenue.

I live in a social democratic country with a strong welfare state funded by a fairly high VAT, with no capital gains taxes at all. It works quite well.

The US, in my view, has managed to get itself into a state where it tries to use the tax code to solve all social and economic problems. Instead of universal health care we have tax deductions for employee provided insurance, and subidies and penalties for individual insurance, handed out via the tax code. instead of welfare payments we have EITC. And when it comes time to look at at inequality, the discussion starts (and stops) with an argument about how progressive the US tax system is. At this point almost any reform will make the US tax code more regressive; the trick is to realise that's okay. Social democratic states work best when you use the tax code to raise revenue, not bring about utopia. But that's a rant for another time. :)

The US has a trade imbalance with Mexico of about -$6B per month. It has a trade imbalance with China of about -$35B per month. The trade deficit with Canada is often below $1B and has flicked to a trade surplus a number of times.

The trade deficit with Mexico is a fluctuation amount in the trade deficit with China.

So it's somewhat incredible that people can continue this "just renegotiate NAFTA" farce. Mexico isn't "the problem", if you believe that balanced trade is a problem.

Jobs didn't go to Mexico. They went to China and automation, and when you were lucky the small remainder went to Mexico.

The article and post I was responding to was specifically about jobs leaving the US for Mexico. A discussion about tax and trade policy which led to so many jobs going to China is also worthwhile, it just wasn't relevant to the article posted by the GP.

It was entirely relevant. In that case the story was about a bearing manufacturer being squeezed by competitors, and then trying to reduce costs by moving to Mexico. Those competitors are almost universally Chinese manufacturers. China has become dominant in steel and ores (raw and processed) of all sorts, and just about every manufactured good. For this submission -- dollar stores -- Chinese goods are the overwhelming bulk of the products.

To put it another way, manufacturers move to Mexico to compete with China, so enjoy those few remaining sales and white collar jobs because the alternative was the company disappearing. If that isn't enough they automate. And now China is automating to ensure they can't be out-automated.

This is actually a great point. And its something that's not exclusive to the US. Western European companies use low-cost labor provided in Eastern Europe to get many of the same advantages and compete with China (I was very surprised that the Nivea shaving cream I use is actually made in Poland!).

The US should embrace Mexico: the Mexican govt. is a close ally, its a source of low cost labor. US companies can continue their ownership/expertise and control over products manufactured in Mexico, while protecting their IP and such. Whereas with China it is a different story....

This is the whole point of the argument from the people in the rust belt. They don't want low cost labor. They want to be high cost labor. They were told that there would be a temporary adjustment period and that all those jobs would come back and it'd be great for them. Well, they've been waiting 30 years of free trade and globalism and they're still suffering. Everyone seems to be responding with all of these arguments about maximizing GDP or whatever, but that's not the only purpose of economic and trade policy.

> This is the whole point of the argument from the people in the rust belt. They don't want low cost labor. They want to be high cost labor.

I'm sorry, its just not a question of what someone wants. Of course they want to have their low-skilled, highly-paid jobs. But labor doesn't automatically go from low to high skilled: you have to proactively engage in training programs, you have to learn the skills that are relevant to the high skilled jobs. Which most of these people, it turns out, have not. And therefore they are left behind.

Those that have embraced the new reality and economy are flourishing like never before. So the promises were true. The quality of life has increased, cost of commodities has decreased. Its just that these people have not managed to participate. Whose fault is that?

And please don't argue for tariffs and such. Trade must go on if only for the security of the current world order. When trade stops, war begins, as Jack Ma has put so astutely.

That's an awfully generous way of describing what happened. Here's another way of looking at it. Wall Street took Main Street's good union jobs where workers had a stake in the value of production and sent them to desperate people in poorer countries with basically no worker or environmental protections.

>And please don't argue for tariffs and such. Trade must go on if only for the security of the current world order. When trade stops, war begins, as Jack Ma has put so astutely.

I don't support tariffs, but there's no need to extend to the level of ridiculousness. Trade with Mexico was happening before NAFTA and it would have continued without it. But that's irrelevant because that's not what I was proposing. Worker and environmental protections could be added and enforced without ending free trade. And changing our tax structure to be more weighed towards consumption than production couldn't even possibly be twisted to sound like it was referring to a tariff.

> Wall Street took Main Street's good union jobs where workers had a stake in the value of production and sent them to desperate people in poorer countries with basically no worker or environmental protections.

You cannot force other countries to enforce environmental and worker protections against their will. The US didn't have these before it became a developed economy. So its mighty rich of you to expect other countries to do so right away. OTOH, China, long a country without environmental protection, has started enforcing more and more rules now that it has capital and knowhow and is rapidly moving into renewables. Your argument using these points is a weird strawman.

> I don't support tariffs, but there's no need to extend to the level of ridiculousness. Trade with Mexico was happening before NAFTA and it would have continued without it. But that's irrelevant because that's not what I was proposing. Worker and environmental protections could be added and enforced without ending free trade. And changing our tax structure to be more weighed towards consumption than production couldn't even possibly be twisted to sound like it was referring to a tariff.

Your argument for this has already been debunked by Lazare. Please stop spreading your dangerous misinformation.

Of course you can't force another country to enact environmental and worker protections against their will. But our country also has its own free will.

>Your argument for this has already been debunked by Lazare.

No, Lazare did the same thing you did which is to play a game of bait and switch by arguing against a point I didn't make. I don't support tariffs, which you falsely accused me of, nor do I believe that putting economic pressure on Mexico to enforce worker and environmental protections would increase US GDP or other silly notions.

I doubt facts have much to do with the rhetoric. It is about having a tiny kernel of truth with lots of veiled racism.

Do you believe that Hillary Clinton and Barak Obama were being racist when they campaigned on a platform to renegotiate NAFTA?

https://www.youtube.com/watch?v=AsO_hL73fEM

No, because they werent simultaneously vilifing Mexicans. Context matters.

I don't really see many factory goods made in Mexico on my day-to-day. Mostly, it's Chinese goods. Sure, Mexico produces machinery, etc. but remember that there is no VAT in Mexico when it's a firm buying the good, so the entire VAT thing becomes moot for most goods.

And the difference in costs wrt China is so large that even adding the 12% difference won't change things (12% = 17% VAT in China - 5.5% VAT where I live in the US).

The post I was responding to had an article specifically about a set of jobs going to Mexico. It's also worth talking about China, but that's not what this particular discussion was about.

Immigrants are taking our jobs, China is taking our jobs & manufacturing, Mexico is doing it, Canada is doing it. Every other country is trying to take our jobs away.

C'mon stop whining and start competing. This is what you signed up for, the thing called global economy.

Any discussion of VAT, or just raising sales taxes, is met with the argument that VAT or sales taxes are regressive.

To what extent can you fool someone into thinking they're doing a productive job? Social welfare for unemployed factory workers feels like not being productive, but what if you raise tariffs on imports to support local industry and give them jobs. Wouldn't it still feel useless? If you know that your job only exists because other Americans are paying you to make you feel productive because they realise you'll enjoy that more than just getting the money directly, wouldn't that be a hollow satisfaction?

Wouldn't it depend on what you were doing? Pushing paper probably feels pretty shitty. Actually cleaning up a forest in California to prevent another fire probably feels pretty good. We don't make people work hard any more because that's degrading? Not really sure why that is. We had work programs for those unemployed. They paid ok. They provided real benefit for the country. For some reason we don't go back this.

I don't mean jobs that provide real benefit. I mean making cars or consumer products in cases where the local industry is dependent on import tariffs to survive because the same thing is made cheaper overseas.

Outsourcing benefits the consumers by keeping prices and inflation down. This helps the poor and elderly on fixed income the most. The reason so many people want Wal Marts in their town is because elderly people demand it, and they're a strong voting bloc.

And there are far more consumers than there are factory workers, so outsourcing is more of a benefit than a negative in an economy.

Give manufacturing to the cheapest foreign labor. It's a good thing. This is why things like NAFTA are a net benefit to the US economy.

The obvious solution for the secondary problems this creates is to increase local industries for local jobs. What can someone do here that absolutely must be done here, instead of by a person in China?

Things like construction works well, where you need someone local to build something since it can't be outsourced - you need to be here. Other traditionally conservative jobs like farming and mining would also be included, but also things like teaching and retail and other service jobs.

The long-term solution is higher-skill jobs, pushing the state-of-the art since US has the top universities.

Freedom of capital movement without freedom of labour movement privileges the capital class over the labour class.

The only equitable free trade agreements include the right to follow the jobs, such as the EU.

The neoliberal position also includes freedom-of-labor-movement.

It's why you had people like Hillary pushing for open borders in her speeches to Goldman Sachs.

The irrelevancy of the nation state is something neoliberals and socialists agree on, yes.

These towns are too small to support the higher skill jobs with state of the art universities. They have no means of self-support.

“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.

I 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.

But 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.

I 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)

Uh... 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.

Hop on the 7 train. Goto jackson heights. Plenty of rink-dink dolla shops. Also check main street flushing.

There's Jack's 99 Cent store, which has at least two locations in midtown Manhattan. http://www.jacksnyc.com/

Yes. 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.

I'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?

That whole...uh...homestead act thing

I 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

“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.

Farming 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.

1. 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.

From the article, talking about Decatur but generally describing "many rural towns":

> Like many rural towns, Decatur once fed itself and shared its bounty with the rest of America. At the turn of the 20th century, it had a tomato cannery and exported peaches, apples, strawberries, and beans by the boxcar from a downtown train depot. A population of 245 in 1915 supported two grocery stores and four general stores. But in the 1930s, blight outbreaks and insect invasions largely wiped out local orchards. The depot is now a museum where antique bushel baskets and poplar harvest crates hang from the ceiling.

I'm from small town Indiana - the biggest "city" I lived in had maybe 50,000 people. The average town I lived in had about 3000 or something.

There has never truly been anything in most of these towns. A good number had rail, canal, or other trasnportation connections, which made them viable (yet still small) at one time. Now most are really dependent on the next biggest "city" outside of the farming communities that bring them together. I Think the reason they get worse is because the hub cities - places like Kokomo, Marion, Muncie, and to a lesser degree Lafayette - have suffered. Manufacturing jobs that held these together no longer do that. Even outside of the "good-paying" factory jobs, it used to be OK to drive to the nearest city for a basic job. That's no longer the case (even though fuel prices have improved). And you wind up feeling like you are stuck.

Michigan is peppered with old railroad stops and logging towns.

My parents grew up on either side of a small village that now has a dollar store as one of 4 or 5 shops. It started when the railroad came in to log and became a "potato town" where farmers brought their potatoes to the railroad.

There's a museum in the old potato warehouses.

Given the scale of technology at the time, it was a hotbed of agriculture, timber, mining and transport.

To New York and London of the 1800s, the Midwest (especially) looked a lot like China did to us 20 years ago -- a massive pool of resources that could be exploited using the new technology.

I live in a dying, rural small town. Well, dying is too strong a word. The population isn't growing, but it's not shrinking either. Stable for the past 20 years. Has around 800 people.

Anyways, this town was founded as a railroad hub in the 1880's. Both a freight hub taking farmers' harvests and delivering goods to the farmers, and a passenger hub transporting people from the surrounding counties into the nearest big cities. The town also provided necessary services at a time when traveling more than 15-20 miles was a hardship. There was a grocery store, general store, cinema, funeral home, pharmacy, bars, couple of hotels, hardware store, and so on. Was a central gathering place for the farmers, and the people who provided services for the farmers.

Many of those businesses are long gone now. The town is still vital for farming because of its mill & grain elevator, and the hardware store still does great business. But the rest is gone. Even the railroad moved away. There are no tracks left in town and the main route is 20-30 miles away. The town survives because of inertia. And because some people are willing to commute an hour to their work in exchange for having a house in the country, and a school with small class sizes for their kids.

Not 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).

The 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.

You 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.

I 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?

A lot of that, in the specific case of milk, is that farther out from cities you can sell it fast enough to make sense. Milk is, legally speaking, "good" for about 2 weeks from the time it comes out of the cow. If you're in a city where everyone eats out at all meals, you might not sell enough out of one store to avoid spoilage. This means that costs to the store go up since they either have to pass on high trucking fees per gallon for buying few gallons, or they amortize those costs and end up charging more per gallon because they throw a lot of it out. Conversely, out in farming country where I grew up, the closest restaurant was 20 minutes drive away, so we didn't eat out much and bought a lot more groceries than the people I lived with in NYC. This means that the Meijer in town rarely has to throw out milk for being passed the sell by date, and is large enough, with people coming in from a 50 mile radius, to move the volume to get volume discounts. Doesn't hurt that a reasonable quantity of their milk is bottled in town and comes from cows about a mile from my house... "Far from transportation hubs" is relative to what you're transporting...

I'm sorry but that sounds ridiculous, do you have actual experience with this sort of thing? I don't, but I'd be pretty blown away if a supply chain logistics expert came in here and said that groceries cost less in rural locations because people don't eat out as much. Why would they be unable to account for that? Do you really think urban consumers have random and unknowable patterns of grocery consumption that would lead to more spoilage?

I'm gonna need to see some sources to back up this claim.

Yeah, I'm going to go with low rent, low wages and low willingness to pay.

I don't think I'd really know until I broke down costs for overhead like rent, utilities, labor, etc. Most of those would be much higher in a urban setting than a rural. Then there's theft, spoilage, etc. Transportation is only one of those items. I think we would be shocked at how much the cost of an off the shelf physical item, isn't the item.

If your two options are overpriced, what is stopping a newcomer from opening up shop?

Economies of scale.

I don’t understand what economies of scale would have to do with being a middleman merchant. It doesn’t take a lot of capital to open a store, and there aren’t many legal barriers, and the workers don’t need to be trained. If there are only two stores, and no one is opening a third, then that must mean there’s not enough profit to make up for the risk of failing and continual operation of the business.

  > It doesn’t take a lot of capital to open a store

I think you underestimate the cost. AFAIU it takes significant capital to open a store, and there are far fewer people in rural areas both capable and willing.

Real estate and labor is still a significant expense. Outside of unionized grocery stores, it's not like store clerks in New York City or San Francisco are making $25/hr.

But to even open a small convenience store you need to purchase tens of thousands of dollars in stock, plus have enough reserves to keep your store operating, able to turnover product, for at least 6 months of negative cash flow. This applies even if you're not franchising.

Basically, even in a rural area your startup costs are easily in the $100,000 to $200,000 range for a small store--at least for anything bigger than a bait shop. Plenty of people in rural areas could secure that kind of financing using mortgages, but once you factor in risk of failure and opportunity costs, you need a pretty significant pool of potential investors before you can expect one of them to take the plunge, and in rural areas the available pools are just too small.

Opportunity cost is a huge deal. Somebody with enough assets to secure a $200,000 loan _and_ who is prepared to lose it all, is probably going to see a significant cut to their earnings compared to what they could be making elsewhere. This is why you see so many immigrants as shop owners--their opportunity costs are effectively lower, by dint of them being first-time players in the local economy, than a native with equivalent assets.

Similarly, outside corporations have to answer to shareholders. Even though well-financed corporations could easily open more stores while still making a profit, such capital has more earning potential elsewhere.

The upshot of all of this is that 1) rural consumers pay significant rents for living in comparatively uncompetitive markets, and 2) theoretically there's ample opportunity for a philanthropic entrepreneur to improve the quality of life of a rural town by strategically opening small stores with more competitive prices. Indeed, professionals who retire to a small town and open a small store are often effectively doing exactly this. (Similar to how well-heeled spouses in large cities burn money on boutique shops, except compared to the retired couple they have less need to actually be profitable, or care about whether they'll put someone else out of business.)

A few hundred thousand is expensive, but not so expensive as to create a barrier to entry restricting the supply of stores in the market. My point is that the risk and possibility of return is so low that it's not worth opening a store, and if that is the case then the existing stores are not "overpriced". They're priced exactly where they should be in order for the business to operate.

Which would imply that they are not, in fact, overpriced.

You need more volume than a small town can provide to turn a profit at such low margins.

Which means that the available options aren't overpriced

Well where I'm from all the local businesses are either competitive on price or politically connected.

If you can't/wont be competitive on price well the selectman better be your friend. When the selectman is your friend you need not fear competitors. Their site plans will be bogged down in red tape and bureaucracy.

US government stats report the national average cost for a gallon of milk is over $3 so any large retailer selling it for a buck a gallon is using it as a loss leader to draw folks into the store. And for more anecdata, our local DG runs $1 and $2 gallon milk sales frequently for the same reason.

I've not been making much lately, and at my last place I actually drew up a spreadsheet of a couple dozen staple groceries that I buy regularly and noted their standard prices at the four stores nearest to me. It was quite useful in deciding when to shop nearby and when it was worth making a longer trip.

Does DG carry fresh produce? You mention milk, and the article mentions groceries.

My observation has been that they seem to carry the kinds of things that never expire -- high profit, low turnover, little spoilage. Lots of soap, spam and cornflakes, but you wouldn't find many fresh vegetables.

Soup?

not as a rule. the one by us had bananas and apples for a while, IIRC, but I think it was just an experiment the manager was trying.

No fresh produce. They are basically a cheaper/dirtier version of CSV/Walgreens.

I go there all the time due to the convenience. It is a mile to Walgreens and a block and half to DG.

Just be sure to check dates on the diet soda as it is often old enough that the sweetener that is no longer sweet.

Edit:

The candy at DG is always top notch. No fear of sugar at the DG.

> Dollar Tree [...] You have to hunt for the bargains that are actually worth it

Ain't that the truth.

Sure, you can get a roll of aluminum foil for $1 at Dollar Tree, while a roll is $4 at Kroger. But the Dollar Tree roll is only 25 feet long, while the Kroger roll is 200 feet. And that $1 screwdriver in the tools section is made of chinesium and will either break or have the tip get warped if you have to use it on anything tough.

That all said, Dollar Tree is THE place to go for party favors. Gift bags for $1 when they'd cost me $5-12 anywhere else? That's a steal! I mean, sure they won't have licensed Disney/Nickelodeon/etc. cartoon characters on them, but I don't think even the kids notice.

> chinesium

Thats the first time I have heard of that. Using it from now on, thanks haha.

https://www.reddit.com/r/skookum

See also: AvE on youtube.

I 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.

Anecdotally... 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.

I love daiso - the Japanese dollar store.

It's amazing.

Except 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.

daiso is great. in LA, we now also have http://miniso.com/ (which i'm sure will expand to other major US cities soon).

Thanks 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.

That's probably part of why your friend has lots of money in the bank.

Q: Why does the guy with a Black Amex shop in a Walmart? A: Because he is the guy with a Black Amex

Exactly. How does someone with money stay in money? Buy it cheap, stack it deep. Get stuff for super cheap and get a lot of it while it's cheap, so you don't have to buy it again when it's much more expensive, and can wait for it to be cheaper again.

That's a foreign concept to people who bitch how poor they are while making $150k/year.

That's not the right comparison. The reported spend level for that card is $250,000 a year. Spending 250K on a credit card annually is not living frugally.

"You get rich by saving what you have" is a nice feel-good story, but you get a lot richer by getting magnitudes more in income.

Thank you, this string was beginning to sound like r/personalfinance was leaking -- a place where people think they can save their way to ultra-wealth.

You can be frugal enough to live a comfortable middle class lifestyle -- but the people who are rich just make a ton more than you. That's it, that's the secret!

You do realize that AWS and GCP take credit cards? If it was just that you are already at sub $25k/mo.

You would need to know what to buy. Helium balloons...$1. Greeting cards, $.50, there are certain things that are much cheaper at Dollar Tree than else where. There are some items that they get you to splurge on impulse on that have a higher profit...Some candy you can get for $.70 at Walmart is $1 at Dollar Tree.

IMO, the best ting to get at Dollar Tree are gift bags. $1 for something that's usually $5-12 anywhere else!

I have noticed that too. Some items are a good deal, some are average, and some overpriced relative to standard discount stores. Clearly Dollar Tree cuts the corner on materials and durability. The items I am pleased are things like ceramic or glass dishes that are painted slightly imperfectly.

I can't help but feel like you're the exception there!

Yes, but for whatever reason, people who have the means tend to prefer 'higher end' stores, even if there is no reason to, in the purely economic/material sense.

I can speak to why I prefer Target over Walmart: much quicker to get in and out (because the Target parking lot is smaller and less congested, and the store is much smaller and less congested) and... if I have to need to speak to an employee I am much more likely to have a productive pleasant experience.

It's something I will never understand. A box of Kraft Mac and Cheese is the same whether I get it from Walmart or Whole Foods. Why would I pay more that I have to?

Because you wouldn’t be buying Kraft Mac and Cheese at a Whole Foods. I’d be surprised if they even sell it.

Also, time. I would rather pay more at Target than wal mart because in my experience it takes longer to check out at Walmart, and god forbid the person paying has a problem with their debit card or coupons or whatever.

And I pay more to shop at Amazon.com so that I don't have to go to Target.

Yeah, can't understand it over here either. All the supermarkets in the UK sell virtually the same products, at least as far as major brands are concerned. Why pay say, £3 for something if the exact same product is available for £1.50 or so in another supermarket down the road?

In the US, most major grocers sell big brand products at roughly the same price. There's variance week-to-week as sales come and go, but if you were to plot the prices of P&G, Kraft, or Nestle products at stores in a specific area, there would be strong overlap.

High-end grocery stores do not tend to sell these brands -- You'll find 0 P&G products at a Whole Foods or Fresh Market. So in that sense, they are selling the same exact products.

I don't know about Dollar General but the demographics of Walmart shoppers is not especially low-end. If my own experience is any indication, there's one that's convenient to me, they have good prices, and they're a one-stop shop for a lot of things. I don't particularly like shopping there but it's a convenient place to pick up staples.

According to Kantar Retail’s ShopperScape, the average Walmart customer is a 51-year-old female with an annual household income of $56,482. Interestingly, that number exceeds the U.S. median household income by $4,500, as measured by the U.S. Census Bureau in 2013, which goes against the perception of Walmart as a low-end discount chain. Eighteen percent of Walmart shoppers earn more than $100,000 per household annually. And Walmart shoppers as a whole, actually earn more than Kmart shoppers.

https://www.ama.org/publications/eNewsletters/Marketing-News...

probably says more about our collective perception that anything near the median, even above it, is low-end.

That perception becomes even more laughable when you realize that the 51 year old female in question is in the top .3% of income globally, while the "permanent underclass" are in the .4% - .8%.

global averages are also meaningless. No one cares if you're doing better than subsistence farmers in west africa if you're having trouble paying rent on your shitty apartment and living paycheck to paycheck in the wealthiest country in the world

You know in movies where the villain rich kid goes to a nice upper middle class home and calls the place a dump? That's what the global poor (as in virtually everyone on the planet) see when western "poor people" complain. It's really tone deaf and quite frankly it only takes a few minutes thought to realize all the talk of "fairness" and "equality" is window dressing and all they are purposing is the .1%'s wealth being redistributed to the .2% - .8%, ignoring the 99.2% of human beings who are actually poor and suffer on a scale that no westerner will ever experience.

If 99% of the world would swap places with you economically speaking how on earth do you get to call yourself poor?

Ignoring your completely made up percentiles and the fact that you're a right-wing troll, poor people in the US get to call themselves poor because they face real problems where the not-poor don't. Access to healthy food, healthcare, housing, quality education, etc. are all diminished for low-income people.

"Ignoring your completely made up percentiles"

You are right, I didn't know the median income moved so much last year.

US Median income = 59,039[0] = the top .2% globally[3]

Average US Worker Pay = 44,148[2] = the top .43% globally[3]

[0]http://www.businessinsider.com/us-census-median-income-2017-...

[2]https://www.thebalance.com/average-salary-information-for-us...

[3]http://www.globalrichlist.com/

"Access to healthy food, healthcare, housing, quality education, etc. are all diminished for low-income people."

And non existent for most of the planet.

EDIT: In regards to the numbers not adding up, You do understand that children don't work right? Remove children (the largest generation ever is currently in high school), then the roughly 40% or so of adults that are unemployed, retired or otherwise out of the workforce and it makes more sense. If you aren't convinced take a look at salaries in European nations, if you happen to find some reasonably high ones on average take a look at the population numbers of those nations.

I'm not going to engage with you beyond this but that doesn't even make sense given that the US makes up ~4-5% of the world population.

Why am I expected to be more concerned with fixing the problems of someone ten thousand miles away instead of the guy I see on the street near where I live? Are we both lucky? Sure. Should we feel bad for that?

I also wonder how a world with 7,600 million people can have a country of 323 million people that's all in the top 1% of people worldwide.

this is the adult version of "there's starving kids in africa, so finish your food". It does absolutely nothing but try to delegitimize the real struggles that the poor face in America.

I disagree with your numbers. I don't think impoverished Americans fall in the top 1% globally in terms of wealth.

These numbers aren't even close to accurate. The actual position of the US underclass (bottom quintile) is more like the 60-85th percentile of global income. After adjusting for CPI it's clear that poverty in the United States is very real.

https://pseudoerasmus.com/2014/09/29/world-income-distributi...

The US underclass also suffer the social and psychological effects of being the underclass, i.e. weaker social support networks and exclusion from the millieu of political priorities.

I have the same experience. I am probably upper middle class (whatever that means) and my kids, as well as my wife like dollar stores. Whenever we visit one I also end up buying at least $10 of random stuff myself (jigsaw puzzles or light sticks or toys to hack).

While I do not dispute the fact that many folks, especially in rural areas are very tight on money, the argument that Dollar Tree cannot be successful without rampant poverty seems unproven.

Just a single data point.

>I am probably upper middle class (whatever that means)

It means upper class

I think things have spread out enough where we have a true upper middle and upper class now. 750k+ is probably a solid upper class person, and 250K+ is probably solidly "upper-middle".

Maybe you feel middle class among the people that you're friends with, but the facts are that in the US, $85k puts you in the top third and $120k in the top fifth, so $250k which is top 4.3% is far from middle for most definitions of it.

https://dqydj.com/household-income-percentile-calculator-201...

I think this data is being very generous. The Tax Policy Center pins the 1% threshold at 750k+

Also Jim Cramer gets his candy there.

> You don't have to be part of a "permanent underclass" to appreciate cheap.

Right, but they're talking about their business plan. They are growing and expanding into rural, economically depressed areas.

You can be rich and still enjoy Dollar General, but if they are expanding massively into areas that mostly just contain the new "underclass," then their claim that "what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America" can still be accurate.

I feel like this should be a banner on every comment page: your anecdotal experience is completely irrelevant when discussing something on a country-wide scale. What you personally choose to do has no bearing on the conversation.

I wouldn't say it's irrelevant, as they're directly related to the OP and are in some cases interesting.

You could certainly say that it's "not conclusive proof" of anything. However, this isn't a crowdsourced thesis paper. It's a web forum discussion thread, about a topic with only a thin tangential connection to the forum's main subject matter (i.e. technology and tech entrepreneurship).

I'd disagree with it as well. Over here in the UK, shops like Poundland and Poundstretcher are doing a booming trade, even in areas with both wealthier populations and a ton of retail options in general. Same goes with cheaper supermarkets too, with the likes of Aldi and Lidl opening up a lot more shops now than they did in the past and gaining a much larger share of the market than the established brands.

It's not just those with few options. It's a general shift towards extremely cheap goods in general, which seems to often be true regardless of the amount of options in the area or the demographics of the folks that live there.

There's a Daiso in Seattle about a block from our largest Asian market. Lots of interesting stuff all for $1.50.

The 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.

3) 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.

To 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.

its 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.

I'd like to see some figures showing that the economically immobile form or will likely form the bulk of Dollar Store's profits.

I 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.

DG 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...

My 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.

> 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

But 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

> 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.

> 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.

But hard to argue with, it would take significant efforts that are unimaginable with modern politics/lobbying to reverse that.

There's just something off about products from DG, especially the ones in specially marked DG packaging.

It's the same products I usually buy, but at a subtly lower quality. I always know, by taste, when cookies come from a dollar store.

Duracell batteries just don't seem to last as long.

Things like that.

It's common for Walmart to convince brand name manufacturers to make "special" (aka cheaper) versions of their normal SKUs for sale at Walmart. Usually this means the product's packaging, contents, and specs stay more-or-less the same, but the general quality of the item is lower in various hard to discern dimensions (cheaper plastics, less metal parts, etc). The idea, I imagine, is to trick comparison shoppers into thinking they got a deal, when really they got exactly what they paid for.

I imagine DG and other stores are doing the same thing, or at least taking advantage of the alternative SKUs.

Side note: Contrast this with Costco, which does the opposite. They get manufacturers to release better versions of their normal SKUs, either higher quality, extra features, extra doodads. My last company sold an electronic product and for a brief time struck a deal with Costco to sell in a few of their stores. Normally our package just includes the product and power supply, but they asked us to also include an HDMI cable for the Costco version of the packaging, just to make things easier for customers (most customers needed an extra HDMI cable to use our product any way, but we never included one usually because our margins tended to be quite thin).

So I've experienced Costco's reverse-Walmart tactic both as a customer and a supplier. It was a neat thing to learn!

Best Buy and Wal-Mart love to hit their customers with the HDMI cables, which clearly make up for lost margins on the printers. I often see them priced in $20 territory.

Stay away from the batteries.

Most other things though - you realize how badly we are getting ripped off everywhere else.

Chocolate, canned things, paper.

I loathe going to the 'Dollar Store' because it's so tacky, but then, I feel like a fool for buying the more expensive 'same thing' elsewhere.

Here is a business plan: the 'Target' version of the 'Dollar Store'.

Someone needs to make 'the cheap store' that is hip - a little focus on colour, layout. Just some thoughtfulness in terms of merchandising would go a long way.

Where is a good place to buy batteries online these days? I feel like Amazon is a crap shoot with all the expired product or knock-offs they have.

Hmm. In Germany, I shop batteries at conrad.de - an electronic retailer chain. They're expensive, yes, but the stock is quality, you can get weird stuff like coin cells with solderable pads on them (which gets handy when you're repairing old stuff with soldered batteries!) and you can have them ship to the nearest store for pickup.

I think with batteries you get what you pay for.

It's a tragedy that there is no objective measure for gosh sakes - some last hours some last days. Can't tell from the label.

The name-brand batteries I get tend to vastly outlast the off-brand ones - Im amazed they can't put some kind of 'kWh' on their labels.

Definitely possible the various brands of batteries have changed since this testing I have referenced this in the past. http://www.batteryshowdown.com/results-hi.html

I bought some AmazonBasics AAs for my old camera (Canon PowerShot SX100 IS). They last hundreds of shots on a charge.

https://www.amazon.com/dp/B00HZV9TGS/

They are rated 2.8, which is below the 3.2 rating that Walmart has on Glassdoor. Low pay, long hours, everyone is a 'manager'...

I go there often as they have much lower prices on snacks/drinks than convenience stores or Walgreens, and there's one very close to my apartment if I need anything else from cleaning supplies to a can of chicken broth and don't feel like making a trip to Walmart or Kroger.

And there are stores in each of the small towns up north I vacation at. They're often the only store in town and there's always a line on the weekends, people buying snacks and coolers and beach supplies.

The stores are bare minimum, no flooring other than concrete, merchandise all over the place, and usually 1 employee working.

Given the low employee ratings on Glassdoor, and the low pay mentioned in the article, how do you feel about supporting them as a business?

The other two options I have are Speedway (gas station) and RiteAid (drugstore), who are rated 2.7 and 3.0 respectively.

Yeah, I talk to the employees who work at our local DG, just a few hundred yards away from my front-door. They are basically paid just above minimum wage, and there is NEVER more than two scheduled at the same time; usually with only an hour overlapping.

It is very hard for them to stock, clean, and help customers when you are tied to a register due to traffic. Not to mention changing price tags, taking out refuse, unloading a truck, and doing all the million things a store needs done a day. The store is messy, but I really can't blame them. They are understaffed and underpaid by design.

I would not call DG an ethical company in any regard with the way they treat their employees.

I can't help but compare that to the family-owned dollar store around the corner from me. Same three Indonesian guys (and occasionally a woman - probably someone's wife) stocking shelves and running the register. In those situations, I assume it's a co-ownership where it's easy to motivate one-another.

Anecdotally, the prices are competitive and the store is clean (although products are haphazardly arranged), so I wonder what a chain dollar store can provide that these entrepreneurs can't.

I worked at a Dollar General for 2 years as a Sales Associate. I don't remember specifics but I think they gave a raise of $0.25/hour every 6 months you work there. I started at min wage and after a 1.5 years they hired someone the same age as me to be a Lead Sales Associate instead of promoting me. I was kind of annoyed about that and asked her how much they payed for Lead Sales Associate. Found out I was making $0.10/hour more than her because of the $0.75 increase from minimum wage that I had gotten for working 1.5 years.

>Low pay, long hours, everyone is a 'manager'...

There have been class-action lawsuits filed against dollars stores addressing this very issue of misclassifying employees as managers in order to avoid paying hourly overtime.

Family Dollar lost a $35 million judgment[0]. Dollar General faced a similar lawsuit, but the case lost class-action certification on a technicality[1].

[0] http://caselaw.findlaw.com/us-11th-circuit/1459728.html

[1] https://newscenter.dollargeneral.com/news/court-decertifies-...

I had a friend who sold software to run generic dollar stores. It was fully integrated POS -> inventory, etc. He was making a ton of money traveling to tiny towns across America.

How is "software to run dollar stores" different from generic retailing software?

Most point of sale software is incredibly fragmented down to hyperspecific use cases. A former company I worked with was partnered with a POS software that was made to service plane re-fueling stations for regional airports if that gives you an idea how segmented that market is.

what @jsonne said. They had specific controls built in for inventory management, automatic re-stocking, etc. Also I think it had to accept EBT payments for certain food items as well.

I used to work in POS and you'd be surprised at how difficult it is to produce uniform POS software. It seems like all retailers have slightly different ways they want things done and were willing to pay, what to me is, a surprisingly large amount of money for their differentiations.

It's extremely common for these companies to consider their POS/supply chain software is a core competency. So Major Dollar Store A would want to make absolutely sure that none of their code changes would be made available to Major Dollar Store 1, even if it were mundane stuff like tax code changes.

On one hand, it's good money, because it is such an integral part of their business. On the other hand, it can be tedious to redo the same thing after the sales staff sells the same customizations with minor differences.

There is a Japanese competitor growing in the US recently. I have seen a few of them in San Francisco. Interesting to see their take on this concept vs American version. http://www.daisojapan.com/

https://flyingtiger.com/ -- And this is a Danish competitor, also popping up in the US. Has a vibe similar to the non-furniture section in Ikea.

I love Flying Tiger. Since it's still novel in America, it's the perfect place to get holiday gifts.

daiso is more akin to dollar tree, in that their products are generally priced at $1.50 (they carry more expensive stuff, and some $1 snacks). dollar general seems to just be a convenience store

During my trip to LA I made time to visit the Daiso. They have a lot of neat stuff you don't generally find in other dollar stores and to me the products seem to be of higher quality (whatever that means for dollar store items).

A Dollar General store opened this spring in my small rural town. Before it opened there was only a Ray's grocery store with a huge markup. I, and everybody with time and a car, used to drive 45+ minutes into town. I'm very price conscious and I've seen some items at DG cheaper than at Winco. Most items are about the same or only slightly higher. So now I buy perishable items (bread, ice cream, etc) at Dollar General and don't need to drive into town as often.

A few thoughts:

* I'm surprised you only have to be 10 miles from a Supermarket to be considered a food desert. I would get this in a populated area, but in a rural town of barely over 1000, it seems expected that you might drive a ways. Hell, in many rural areas you might drive a mile or two to even be on a main road! They do specifically mention "a rural area 10 miles.." which probably means in a city the distance to qualify as a food desert would be much smaller, which makes sense.

* I wonder why they didn't bother verifying pay at the chicken plant. If the workers say they make $8.50 an hour and the employer says the minimum pay is $11.50, it seems like a quick glance at a paystub is all it would take to validate the story rather than just throw up your arms and say "well, some people disagree". Though I imagine the most likely cause is the latinos are undocumented and hence being paid under the table.

* Sounds like the 20-30mi roundtrip drive to Bentonville is costly in terms of gas money (not to mention time!), but I was stunned that the employee talked about how many of the customers were in the Dollar General store 3-4 times a day (!!)

I know (based on a NY times article I can't quite find atm), that a lot of the labor at the factories is "contractor" style labor that's not paid as well as the full time positions. These full time positions are obviously harder to get, but do allow the company to say "minimum pay is $11.50) while in reality, they're probably paying less to a significant portion of their workforce.

convenience + not outrageous prices (more than Walmart ... but way closer and faster) + and [generally] friendly staff == solid business results

Same thing with Harbor Freight. It's fast to go in and grab a tool, they're cheap, and they have everything.

While I never buy anything there, I have been impressed with their ads for how cheap good tools are from HB

Harbor Freight doesn't sell "good tools". They sell cheap tools. Often it's good enough to work with, but nothing they sell is anything you'd want to rely on for daily use.

As a big fan of quality tools, I find they are useful for certain things you really can't justify the cost of. i.e., I need this stupid security torx screwdriver. Need a new air compressor hose or connectors, bulk shop rags, bungee cords, etc.

And "good enough" is just that - good enough.

Same with Northern Tool & Supply: some things just don't matter where you get them.

Wrote about it 6+ years ago - https://antipaucity.com/2011/02/24/how-much-does-quality-mat...

And they're good enough for the majority of people and the majority of tasks the majority of the time

Looking at the numbers:

A typical Dollar General costs $250,000 to open.

The average sales per square foot is $229.

The store in the article is 17,000 sq ft.

Dollar Generals overall profit margins are 30%.

That store should have earned ~$3,900,000 in sales its first year, which is roughly $1.2 million in profits.

No wonder they are expanding so fast, the profits cover the initial investment costs in as little as 3 months. That's incredible.

when I worked for one ; top three drugstore chain, I shook my head during a loss prevention meeting when one of our managers said over 90% of the stores profits came from the cosmetics isle. It was after the 08' crash and there was a concern over theft !

Interesting article. Left my house in the middle of reading the article to go to Dollar General and get cookies. That Dollar General has been there my whole life, but only recently did we start going there regularly. It was mostly after they started selling some food, and esp. after they started selling milk and eggs at a loss. I was there 4 times in one day this weekend. We would never have done that a few years ago. They also went from one grimy store to three stores in the last five years in our small Midwestern town.

There's a Dollar Tree (competitor to Dollar General with a similar business model) in South San Francisco that I shop at sometimes for cleaning supplies/paper goods/party items. I wouldn't trust most of their food offerings, but for the sort of thing I buy there they generally charge 30-50% of what a traditional grocery store in the area does. I have no idea how they can make this business model work with the cost of rent in the area, but I love it.

The stuff Dollar Tree sells is reeeeally low quality. Take a cheap, dishwasher-safe, plastic cup for example. I can get those in bulk from Alibaba for $0.10 / cup. Dollar Tree might sell something like that for $1.00 -- there's a bunch of additional overhead, of course, but I think it makes perfect sense that they'd profit on stuff like that.

Also would not be surprised if they shrugged those losses off as marketing (brand recognition / visibility) costs.

"Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America"

I would phrase that differently.

"Essentially what the dollar stores are betting on in a large way is that we are going to see an increase in the underclass in America".

We've always had an underclass, it's just increasing at an unprecedented rate.

"If we don't have it, you don't need it." manager or w. Paris ME DG told me.

DG was closest anything 17 minutes from vacation home

I moved to my parent's lakehouse in rural Kentucky this Fall to study and build a software project.

One of the first things I noticed is exclaimed succinctly in this headline, and they can milk this cow dry for a long time.

I submit regular complaints on their websites, to help the sweet ladies who keep my local one afloat. The management would not let them use AC until mid-July.

Dollar Stores are a terrible deal. The products not only tend to be inferior but they skimp on the quantity, so you end up paying a much higher per-unit price than had you shopped at Walmart or anywhere else.

Living in the rural mid-Atlantic U.S., I've definitely seen a lot of Dollar Generals popping up all over the place. Never knew they carried groceries like meat and produce, though.

This is cool I was just wondering why they have opened 3 different Dollar General stores in my area! I can drive to all 3 in less than 10 minutes it's insane.

"Where even Wal-Mart failed"

I wonder how the new info that Wal-Mart is now outpricing (cheaper) that dg will affect this?

The two have completely different business models.

Where I grew up there is a WalMart 45 minutes away in the "city", along with Target, Best Buy, etc. etc. You go there on the weekend for your afternoon shopping trip. It's a basically weekly event, and most everyone does it.

Dollar General is in town and you can go there after work if you need something.

Most people I know frequent both. The difference is that WalMart requires a much larger population to support, whereas Dollar General can get by with a few (1 - 5) thousand people.

I've also seen dollar stores (not Dollar General, but others) in underserved areas of major cities.

Referral link for paywall: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

Who ever made that Who Shops Where in Arkansas graph needs to be castrated.

I hope your severity doesn't get your comment downvoted, because I was hoping there'd be some discussion on that chart.

It's trying to do a lot of things with ranking within a metric and comparing across metrics. A big problem I see is that the intervals aren't equal even for metrics with the same units. If I want to compare how far apart Family Dollar and Dollar General are in terms of customer unemployment or bachelors' percentage, well graphically it's pretty much useless. There's more spatial difference across the entire Unemployed line than there is between a (presumably) equal distance in the Bachelor's line.

Even if it's only designed to allow me to rank these stores across numerous metrics, the alignment of the legend with the first row of colored points confused me for a minute: I was reading the legend not as referring to color, but to column.

I'd be curious to see what Kaiser Fung at Junk Charts [0] has to say about it.

[0] http://junkcharts.typepad.com/

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