The economics of dollar stores | Hacker News Reader

The economics of dollar stores

thehustle.co

285 pointspseudolus214 comments

The article sort of conflates two different models. Dollar Tree is actual "everything in the store is a dollar" while Dollar General and Family General are mostly small retail stores that sell things at a variety of prices. They round prices to the dollar, but otherwise are traditional retail that just locates in unusual locations.

Five Below is another "dollar store" in that blend, focusing mostly on goods for young adults and teens. Originally everything was below $5, up to and including some video games and electronics like computer accessories or even drones.

It isn't too new of a niche, closeout retailers have often existed and its not uncommon with small businesses; ocean state job lot in the NE kind of exists with this model. I think what is unique is the small retail store model; dollar generals are as big as a walgreens or CVS, but stock a pretty full assortment of goods for the size. They are pretty impressive for being micro-super walmarts in a sense.

Dollar tree's are interesting because you can actually find books and dvd/blu-ray there. It's sort of a commentary on how tough it must be to be a creative when I can buy remnant books from A list authors sometimes; I've seen Jonathan Franzen, John Scalzi, Bill Mckibben, And Rod Dreher books end up in the dollar bin. There's also a staggering amount of generic animated dvds in the pixar/disney mode.

Paperback books that don’t sell are discarded so as not to compete with long tail purchases but hard cover books are expensive enough in terms of production and distribution that the end up getting discounted instead.

Can you expand on this? Do you mean a paperback copy of a book somehow competes with a later sale of the same book?

Supply and demand. If you decrease the supply, the small existing demand will pay more.

When suppliers destroy supply, it makes a good argument for piracy

I somewhat agree with you but I really do like some kind of curation, even if that curation is done by the market. There's nothing inherently good with a surplus of bad goods. I'd prefer a copy of "The Library of Babel" vs. all of the books inside of it.

Yes - they don't want to flood the used book market with paperbacks, which would compete with future sales of the same title.

If you're a bookstore and a hardcover doesn't sell, you have to return the whole book to the publisher. If a paperback doesn't sell, you just have to rip off the front cover and return that to the publisher.

https://en.m.wikipedia.org/wiki/Stripped_book

That's definitely not true for all paperback books. I often buy remaindered paperbacks at Dog Eared and Alley Cat bookshops in San Francisco. You can tell they're remaindered because they're marked with felt tip.

When I lived in the UK, Fopp was a great source for them (along with discount films and music.)

My knowledge of the subject goes back to a high school job in a bookstore. Things may well have changed since then. Back then we ripped the covers off mass market paperback and sent them back to the publisher for a credit. The books were supposed to be discarded but you did from time to time come across a paperback book with no cover at a thrift store or similar, so clearly that didn’t always happen.

I’ve had plenty of paperback books lose their covers fairly quickly, seeing used books without covers doesn’t mean they had their covers intentionally ripped off.

The remaindered paperbacks I bought may have been higher quality trade paperback versions rather than the regular mass market ones which get pulped.

Right. Many years ago, I worked for a department store or two that carried books. Some of those missing the front cover ended up where employees could take them. I suppose that this was not supposed to happen, but it did.

> It isn't too new of a niche

Definitely an old retail segment. Walmart's origins derive from Sam Walton operating a Ben Franklin five-and-dime variety store (a wholesaler dating to the 19th century), which was that era's equivalent of a Dollar General store (including having spread itself to 2500 locations all over the place). With him later opening Walton's five-and-dime store.

Interesting representative story on the recent conclusion to that chain:

https://www.mprnews.org/story/2015/10/20/ben-franklin

Ocean State Job Lot is fun. Also in New England I love the Marden's business model. As far as I can tell from the advertising it really is a family business that's hit its scaling limits at about 15 stores -- when you walk in you see whatever remnant stuff a member of the Marden family thought people would like to buy when they went shopping for remnant inventory. Like they list the names of people who buy this stuff on their web site: https://www.mardens.com/sell-to-us/

They even have a special type of store dedicated to flooring and I feel like this reflects the family structure somehow (like a niece or nephew is really into flooring or something). It's just such interesting retail.

One thing I really like about Ocean State Job Lot is they have a couple isles of really cheap fun timeless kids toys that I remember playing with as a kid. I think for a lot of lower income families it's probably one of the only times a kid gets the thrill of walking into a store and selecting new toys to buy.

I like their ultra-cheap scientific calculators (their markup is 100% from the Alibaba high volume price, but still cheap) and art supplies. I bought a metal ruler from them once, only to find that it had a misprint on the scale.

I remember Dollar General carrying cheap/generic brands growing up, but when I went to one last year it seemed indistinguishable in selection and pricing to a Walmart or similar large chain grocery store.

The article calls out the difference between Dollar Tree (everything is a dollar) and Dollar General (low prices but not necessarily a dollar) in one of the images.

> It's sort of a commentary on how tough it must be to be a creative when I can buy remnant books from A list authors sometimes; I've seen Jonathan Franzen, John Scalzi, Bill Mckibben, And Rod Dreher books end up in the dollar bin.

Talented authors who drove retail bookstores to stock their inventory. But when some of it didn't sell, the dollar stores snapped it up for nearly nothing. IMO that's not a slight to the authors. It's to their credit that the bookstores saw their promise based on existing sales at the time.

So if I can summarize the article, the economics of dollar stores are "sell things for more than it cost to buy them".

I mean, it seemed like the article wanted to have some nefarious take, but offering smaller quantities of items so people can afford them, even if the per-unit cost is higher, doesn't seem like some unexpected malicious intent. I mean, I certainly expect to pay more per gram if I'm buying a travel size of toothpaste vs. the 4 megatube family pack at Costco.

And the fact that the stores are oriented so the popular items are in the back - just like literally every grocery store in the country - is also unsurprising.

I too was under the impression that there was some kind of clever way these shops operate, based on the title. But the economics are exactly like any other shop.

There’s a good Planet Money on this from NPR. They imply that the real profit is from not stocking fresh goods and other items that 1) spoil, 2) have lower margins and 3) require employees to constantly restock. So they basically sell high-margin goods (negotiated in bulk) with absolute minimum costs. That’s it.

[0] https://www.npr.org/sections/money/2019/04/26/717665452/epis...

I haven't RTFA, but it's always struck me as funny that some of the items at the dollar store are 49¢ at the big box. Stuff like hose clamps comes to mind. You can get quite ripped off if you let yourself think "dollar = cheaper than everywhere else".

Yeah, but the article provides relevant numbers.

I think it's useful information, even if it should be intuitive. I know a number of people who shop at the dollar store because they believe they're saving money. In particular I think it's nice to shed some light on the special arrangements the stores make with manufacturers to produce products that look like the equivalent of what you get in a normal store but only cost a dollar, while in fact containing so little of the actual product that they're a worse deal.

Pound Shops, a similar idea in the UK, seem to have several different economic strategies in every store.

In some cases they are selling (for £1) a product that your supermarket pays 70p for and sometimes sells for £1.50 and other times "discounts" to 75p. If you bought it from the Pound Shop when it's £1.50 at a supermarket that seems like a bargain, if it was 75p at the supermarket it seems like a rip off. But it's the same product either way.

In some cases as you described they have a 300g version of a 450g product, theirs costs £1 and the "ordinary" version is £1.40 from many retailers. So they are more expensive on a "per-unit" basis. But let's face it, you were going to eat the entire product even though the manufacturer says it's for "sharing", so maybe they did you a favour.

In some cases the manufacturer is engaged in simple price discrimination. The pound store has the exact same quantity of the branded product, but it's wrapped with a label explaining that it only cost £1 whereas the version in the supermarket is unlabelled and costs £1.50. The manufacturer guesses that many people who can afford £1.50 will choose not to visit a Pound Shop, so any sales at the lower price are extra sales and don't cannibalise supermarket sales.

In some cases they're End of Line goods. The supermarket doesn't want to stock a product with a finite supply, especially out of season - it looks desperate, but a Pound Shop can put boxes of "Santa Shapes" candy on shelves in January for £1 (original RRP £2.50) and customers will buy them because candy is candy, who cares if it's Xmas themed when it's so cheap? Or after supermarkets pull the £1.85 "barbecue flavour" chocolate assortment you launched because it doesn't sell, bundle them two for £1 at a Pound Shop and they disappear. Do the Pound Shop's customers eat them? Who cares.

The final category that's most interesting to me is bulk electronics. If you stock sixteen different adaptors in an electronics shop, they move so slowly you probably have to charge £2.50 or more for them even though they're quite cheap to make. But a Pound Shop can pick one adaptor they think sells (say, USB A to USB C is plausible) buy an entire container of them, put them on shelves for a few weeks at £1 each, and they vanish. Want that USB A to C adaptor a month later? Too bad, now they have a GU10 LED lamp, and a month after that maybe it's a laser pointer. Could I get these products on Amazon any time? Yeah, but either the postage kills the deal, or it's "free" and the price is higher.

The 'lower total cost, higher unit cost' problem is one of the reasons I love the way the EU mandates advertising prices. i.e. anything sold needs to have the price you actually pay on it (including VAT/other charges), and the cost per unit. (€/l or €/kg).

This saves me an absurd amount of planning/thinking as I can compare an equivalent cost number whenever I see a substitutable product somewhere. Also saves you from being fooled by your own assumptions, like when the unit cost of the largest cereal box is higher than a smaller one.

I wish unit prices were always per the same unit, too. Sometimes I'll see a single pack of something with the price per ounce, and a triple pack with the price per pound (or something).

I thought this was already mandated by US law, but ...

I absolutely love dollar stores. I recently needed to buy a set of crayons for my son and the options were $5 on Amazon, $4 at Target or $1 at the local Dollar Tree (and the pack had 36 crayons, vs 24 from the other sources!).

They're not the right place for everything, but for kids' art supplies, cleaning products, party paraphernalia, seasonal decor, etc, they can't be beat. They seem to have a pretty strong stigma for some reason (seems like most professionals wouldn't be caught dead in one) but they shouldn't. Great place to shop!

The article claims that Dollar Stores are more expensive. They often sell smaller amounts to meet the price, but unit cost is more

Could be that they lure people in with lower unit costs on some key, easily comparable items, and then the customer ends up buying a bunch of higher margin items too. That happens to me often - go in for something I know is way cheaper than at Walmart and directly comparable, and end up picking up a few other things that may not be a killer deal but saves a second stop at another store.

Or perhaps some Dollar Stores also use liquidation inventory to sell lower than normal prices?

Doubt that crayons are loss leaders.

That's called a loss-leader strategy.

It's the same strategy fishermen use when they invest a small amount of money at the bait store before a fishing trip. As you said, it's a lure.

The strategy is not exclusive to dollar stores.

> Like other retailers, a dollar store's interior layout is set up so that commonly purchased staples like cleaning supplies and milk are in the back of the store. This requires shoppers to walk through other aisles, resulting in impulse buys.

So, people's thoughts and decisions are affected by what is immediately in front of their eyes, despite their considered intentions arrived at through deliberation.

We all know that's true because it happens to us, and we've all experienced forgetting something until we walk out of the house, and then returning to inside the house or room before we can remember it again. Our thoughts are significantly dependent upon our circumstances.

What's surprising is that the full impact of our non-independence of thought has not been well accounted for by philosophers who speculate about the concept of free will.

I disagree with your characterization of this being non-independence of thought.

You don’t know what you don’t know. It’s not on your list because you didn’t want it when you went to the store. You saw it, and now you know about it, and now you want it, so you buy it.

I never understand people who try to make this seem nefarious. You walk past 10,000 things you didn’t think about and don’t want so you just walk past it without picking it up. There obviously some small exceptions, like filling the checkout lane with candy because they know kids are going to harass the parents, but in general it’s about the first strategy. Show people things they want that they didn’t know they wanted when they walked in so they will spend more money in your store.

Nobody called it "nefarious shopping." It is called "impulse buying," and stores are configured to maximize impulse buys whether through candy at the checkout lane or something else. Stores are arranged in the front decompression zone, the front, the center, checkout, etc. for this reason.

> You don’t know what you don’t know.

We all know and expect soda, chips, chocolate, and other highly fattening snack foods to be in the store, prominently displayed near checkouts, often advertised at a discount on sale.

> It’s not on your list because you didn’t want it when you went to the store.

Right. That's because in our considered state of mind, we reject those dietary choices as unhealthy. And yet, we end up buying it after we are exposed to retail layouts that are designed by psychologists to maximise the profit of the store owner.

> I never understand people who try to make this seem nefarious.

What would you call it?

That's not "expensive". Expensive is that I need to pay $1.99 for something and I have throw away half of it because I couldn't use it. I'd rather spend $0.99 for 1/3 the quantity. I am spending less money after all.

I think this point is underappreciated. Sometimes it definitely makes sense to pay more per unit/kg for some item for a smaller quantity if otherwise you'd be throwing out an excess

At some point I bought a sampler set of miniature colognes from one of the big makers (CK I think). Probably 5 x 5ml or something. Dirt cheap, and perfect for traveling. Turns out 5ml of cologne is enough for years and years if you use it rarely and sparingly (as you should). The huge 50 or 75ml perfume bottles must be one of the products most often thrown out without finishing.

I bet CK thought these sampler sets would create incentive to buy one of their larger bottles, not make customers set for life on cologne.

No sure they are thrown out due to the expense, I know I would never throw one out. But I do end up with 3 different ones on rotation because I don't want the same smell all the time. Smaller ones would certainly be better for variety.

They effectively have no expiration date as well, so there is no sense in throwing them out.

Personally I'm happy with my one scent though and will just keep using that until it runs out

Really what I was getting at with my original comment was more about food, and how it sometimes makes sense to take the higher price with a smaller quantity, iff you don't believe you'll be able to consume the larger quantity before it expires

the ones i got as gifts always evaporated before i used them all.

> "...if you use it rarely and sparingly (as you should)"

yes please, a hint is ok, but stinking of cologne (especially the really musky stuff) is a big turn-off for many women.

Which doesnt apply to deodorant, toothpaste, cleaning supplies... or much of anything that Dollar Tree sells. Unless you are throwing it away for some reason other than that it went bad like you had to buy some because you are traveling, in which case, you are not at all the normal customer.

Sometimes it does. If you rarely use bleach, what is the point of buying a 5 year supply for $X when you can get a 2 year supply for $x/2?

Bleach does go bad though... If left too long it will decompose and lose potency... So not the best example maybe...

The smell sizes are great for traveling.

I was thinking about this the other day. Instead of raising prices on junk food, they are making the packaged size smaller. This might not be a bad thing in the US because of the obesity problem. Since people will be eating less unhealthy food they might save on health care costs.

I agree with the claim that dollar stores are sometimes more expensive, but asserting the unit cost is higher is an over generalization.

One of the nice things about dollar stores, in my part of the world, is they don't play games with sale prices. Sale prices make it easy to cherry pick prices seen at other retail chains once or twice a year then claim they are cheaper. In many of those cases, the product is only cheaper per unit because they force you to buy the product in larger quantities (e.g. by taping or shrink wrapping multiple units together). That may be fine if it is a product where you can plan ahead, has a long shelf life, or is something you use in quantity. It is not so great when it increases waste since it is a "just in case" product or you won't be able to use it before it expires. If your aim is to reduce waste (or resources or money), you may be better off buying the product when or as it is needed. At any particular moment in time, the unit price at a dollar store may very well be lower than that of other retailers.

Another result of this, especially with food, is that it probably causes you to gorge in order to keep things sold in too large amounts from going bad. Now you don't have any of the thing you like, so you go buy another oversized package which will lead to you gorging again in a week or two.

Like any retailer, buyer beware!

Some things at dollar stores are great deals, many things are not. You just need to know your prices.

“Dollar General” and “Family Dollar” stores tend to target poorer buyers who make poor pricing decisions from many points of view for a variety of reasons, ranging from poor access to transportation to poor financial literacy.

I like them too, but the article notes that their prices per unit are usually a bit higher than at other stores.

I guess (we don't really have them here) that while they might never be the cheapest option they will most often be a cheap option.

And where every other store is cheap on some stuff and absolutely ripping you off on others it is kind of nice to know with greater confidence that you are not being ripped off.

Also, if a 10x pack costs 90% of a 24x pack at the regular store a dollar store might be decently priced for a 8x pack. Which is fantastic if you only need and want ~5.

Your whole country is exotic to me, and I formed my opinion on things as a old adult.

For me dollars store are the reliable place to buy toxic stuff, cleaning supplies and in general non-food item.

I like that it’s small and to the point.

The food there make me sad, though. It’s almost exclusively crap.

> The food there make me sad, though. It’s almost exclusively crap.

It depends upon what type of food you are looking for. If you are looking for branded things like pop, chips, chocolates/candy etc, then they are very good deal.

I think that's what was meant with crap

I would have assumed the crap they meant the sad looking meats and cheeses in the refrigerators.

Dollar Stores are hit and miss. I needed some emergency earbuds for a trip. Wow, I didn't know you could manufacture earbuds that sounded that bad, even at the $1 price point. I am by no means an audiophile either.

That's a list of crap food, which might be what was meant. However, if you compare the ingredient list for a seemingly identical item, the ingredients (contents or quantity) will many times differ between a dollar store and elsewhere.

"seemingly identical item" -

Can you give a more specific example of this? Like if it's two different brands of "chicken noodle soup", then I'd assume the ingredient list could/would change.

But are you saying that a can of Campbell's chicken noodle soup in the dollar store is different from the Campbell's can at Walmart? e.g. the same brand ingredients change?

I meant the second. I can't say that happens in all cases, but I've specifically checked this for some food items at Dollar Tree, and the ingredient lists differed in those cases.

It was about two years ago when I checked. I noticed an item in the refrigerated section at Dollar Tree, where the item was $1, yet I had just purchased the same item at the grocery for more money. I purchased the item at Dollar Tree and compared the ingredients.

Then I checked one other item, as it occurred to me. It was idle curiousity more than anything else. I know there much be some difference between the item at a dollar store and the item at a non-dollar store, either expiration, item size, item ingredients, or something else.

Interesting, thanks.

My local Dollar Tree has excellent food - sure, no fresh vegetables but there are staples plus name brands that costs 2x-5x at the local grocery stores and other stuff that's not even available at other stores (specifics off the top of my head - Zapp's Voodoo Heat chips, I've never seen them anywhere else besides the dollar store).

Obviously the stock is somewhat inconsistent.

My local Dollar Tree offers 12 eggs for a dollar, a loaf of bread for a dollar, a decent sized bag of frozen berries or vegetables for a dollar, 2 pounds of rice for a dollar, a 26oz can of baked beans for a dollar. That's not exactly crap.

> cleaning supplies

Yikes! Cleaning supplies and medical stuff are things I will _never_ buy from a dollar store. Most of the cleaning chemicals have more fragrance than active ingredients, they never work well but the place smells like you cleaned like mad. I have to assume the medical stuff is just as poor quality, but I have no way of assessing it.

It also bothers me that a lot of the cleaning products are packed in bottles shaped like drink bottles; an illiterate or merely distracted person could be in for a nasty surprise.

We agree on the food, for sure. It never _says_ it's expired, but it tastes ten years old.

One thing I always get at the dollar store is lint traps. The big box charges 3x the price for an absolutely equivalent product. Lint traps and office supplies. I don't think I've ever bought envelopes or binder clips anywhere else.

You could just shop in China yourself (AliExpress)

Sure, and wait a month for an empty box to show up

AliExpress has escrow. You are essentially less likely to be screwed than with Amazon (no escrow, and still many shady sellers)

I also never had empty or wrong products show up, and I shop nearly everything that is made in china anyway directly from ali. And assuming it would happen, I just get my money back thanks to escrow.

I was still screwed, couldn’t get a refund on a 10 USD USB-C headphone adapter that hissed with my iPad. They claimed they couldn’t hear it on the video I submitted, and there was no possibility to protest or submit a new recording

I too have been screwed by Aliexpress escrow. It’s worthless and protects the seller first.

I got a combined shipment that was missing an item. I sent a message telling them that one item in the shipment was missing. They responded by saying that the tracking number showed delivered, closed the case, and gave me no way to respond.

I buy from Chinese sellers on eBay instead, their buyer protection actually works.

I got my money back each time so far if the item was broken or different than advertised. No questions asked. Prolly they are more careful with European customers? Maybe because I spent relatively large amounts already? No idea

I bought a couple of items there and they were great deals. Tried buying a third item and it never showed and the seller said to wait a bit longer and eventually it went over the time limit to get a refund. Seller didn’t respond after that, so I’ve learned my lesson and won’t shop there anymore.

Agreed. The cheapest I could buy a plastic spatula on amazon was $7? Bought one for a dollar instead. Seems to work fine.

That might be one of the easiest use cases for me to justify spending more on quality, not that I would trust Amazon to sell quality, but from a reputable brand or retail store.

I am assuming that a plastic spatula will degrade when heated up, and a lower quality plastic will have a higher probability of degrading and depositing plastic into the food being cooked, which then gets ingested of course.

It could be quite difficult to tell the difference between the two spatulas. They might be identical. Just because it costs more is no guarantee of higher qualify.

As goes with everything in life, nothing is certain. But I operate under the assumption that there is a higher probability that a reputable brand known for selling higher quality goods is actually selling higher quality goods and performing the necessary quality control measures to ensure it.

Of course, one also has to remain informed on which brands are decreasing their quality and cashing in on their reputation.

Well GP was talking about amazon, so there's a fair chance that the $7 was also low quality chinese junk,and if you wanted higher quality stuff you'd need to shell out $15 at least.

Buying from a brand with a reputation is very different than assuming a more expensive item is higher quality.

Hence ... brands, and other forms of reputation generation and management. Sure, these things are never a guarantee of quality, but the brand owners want you to feel that they are.

Sometimes, too, they do turn out to be!

That’s why I prefer wood ones. I can’t say I ever bought one at a pound store, but even a basic one for £5 lasts years.

$7? You absolutely did not look very hard. I just checked UK Amazon and found them for £1

I just checked again in America. The cheaper ones seem to have very high shipping costs.

I included shipping. Maybe American amazon is different in some way

I had a friend who bought a $1 spatula. He's dead now.

They are great if you stay away from certain things like batteries, which are usually drained or near dead.

Travel supplies are the big draw for me.

Most stores charge about as much for a mini tube of toothpaste (or mouth wash, whatever) as a full-sized, name brand mega sized one. Dollar Tree will usually sell you a multi-pack of minis for $1, cheaper than the bulk purchase. AND the more expensive will usually have ANTI-features like a flip-top instead of basic screw-on lid... No thanks, I prefer the toothpaste to stay in the tube, I'm not buying it to repaint the interior of my bag...

Toothbrush at Walgreens: $3

Toothbrush at a gas station: $8

Toothbrush at Dollar Tree: 4 for $1

They also have the added advantage of often being conveniently located. Little store around the corner, instead of fighting through traffic, going miles to the central big-box retailer everyone does their big shopping trips at.

100 yen (approx $1) have long been huge in Japan too, and their business model is even simpler: most of what they sell is plastic and made to order in China in huge volumes. They have grocery selections too, but nothing that would require refrigeration or otherwise spoil quickly. And while hardly luxury, they're also not down-market in the way that Dollar X's in the US are, many are located in central business districts and there's no stigma to shopping in one.

https://en.wikipedia.org/wiki/100-yen_shop

Daiso, the largest chain in Japan, designs a lot of their own products, and the shear variety of some product lines is one of the stores’ attractions. Twenty years ago, before going back to the U.S. from Japan for a family reunion, I bought fifty folding fans, each with a different Japanesey design, at Daiso as gifts. The relatives I handed them out to seemed delighted, and they cost me only a buck apiece.

Until I started working from home last year, I wore a suit and tie to my job in Tokyo. I have a collection of more than two hundred ties, each one different, all looking reasonably decent, bought for a hundred yen apiece at Daiso ten or twelve years ago.

There are Daiso locations in the US (and I think many other countries now), at least in California. They aren't as good as the ones in Japan, and they have somewhat different items in one location than another. But they do have lots of interesting stuff, although most of it is $1.50 and up. The tool section is pretty neat as well as their stationary section.

As someone who’s spent time between California and Japan recently (2019-2020), I honestly think the differences between a Daiso in the US (Los Angeles) and a Daiso in Japan (central Tokyo) are very slight. I bought a lot of little gifts for people from Daiso when I was in Japan, and I’ve found that most of what I bought is also available in the stateside stores. Most of the everyday goods (household, serving ware, tools, cleaning, toys, stationery, etc.) are identical, with only the food and beverage section differing significantly. For instance, in Japan there is a limited stock of local brands by the register (somewhat marked up vs. the local combini). In California, it’s a very select handful of true imports, but most of it are brands who are producing a local US variant that Daiso doesn’t have to ship through customs. And interestingly, they stock some specialty Hawaiian drinks like POG that you can’t find easily in either California or Japan.

Hey that could be. So yeah I didn't mean to imply the goods were different, just less selection. I mostly go to the ones in Oceanside and Keary Mesa, and the last one I visited in Japan was in Fujisawa early 2019. I haven't been to the one on Sawtelle in a while but I do seem to remember it being bigger than the ones in San Diego.

Right, and it appears to be a completely different model than that presented in the article.

What’s interesting is that a significant fraction of the products at Daiso are made in Japan. Not by any means the majority, but a lot of the simple injection modeled products (containers), some of the ceramic plates and bowls, some of the chopsticks.

It’s pretty shocking to me that they can make these products domestically and sell them for ~$1. But I suspect for simple products the economics of making these items locally still makes sense, when compared with shipping a bulky object which is largely air.

i love daiso. the one in little tokyo (downtown LA) is actually spacious, relatively-speaking. apparently ikea loves them too, as i've seen a lot of gadgets that are staple items at daiso make it over the years into the ikea catalog. little kitchen items are what i notice the most, but other things too.

I'm not sure about US dollar stores but there are really good deals at Japan's 100 yen shops. For example simple plastic boxes that cost 10 euros in France are at 100 yen in those shops.

So in Japan it's not just for poor people, there are items where it doesn't make sense to buy them anywhere else than a 100 yen shop.

They are popular because they are good. The products have good designs and reasonable quality, at or above the $1 level. The stores are bright, clean, and the staff friendly.

My guess is that they have a much more integrated supply chain than the stores in the US and can better understand what their customers want/need.

There is an air of quality around ¥100 shop shop and a stigma of $1 stores being junk. Any reasonable Okaasan takes it as a badge of honor finding good stuff and bragging about it.

I used to have the same opinion of dollar tree and co, until I met my wife, who shops there frequently.

Like any other store, there are certain things that you should get elsewhere. However, I was genuinely impressed that the quality of many things was quite a bit higher than what the stereotype had led me to believe.

Edit: perhaps it is worth pointing out that she also shops Wal-Mart and aldis, and buys only from each of the three stores what the better deals are.

What are the good things to buy there? I think someone else mentioned crayons in this thread.

It really depends on your needs and access to other stores.

There's a relatively limited selection of greeting cards compared to places like walmart or target, but you'll save 4-5 dollars each that way.

Dish detergent and other cleaning supplies can be hit or miss, same with staple spices like black pepper.

We have a lot of battery operated candles that we use semi-frequently, and after a failed experiment with rechargable batteries bought online, we went back to the dollar packs of AA and AAA. For smoke detectors and other 9v batteries, I tend to go elsewhere.

Pet supplies can be a really good deal- collars and toys. I don't know that I would trust their food or treats other than the milkbone biscuits that my wife's dog has been happily eating for 17 years.

Laundry softener sheets if you use them, holiday decor, some craft supplies, scissors or other items that you might use on occasion. If it is going to see heavy use, probably buy elsewhere. If not, and you just need something that gets the job done, dollar tree can be hard to beat.

That last point is why I tend to dislike applying the "boots" trope to these stores- not everything you buy will be worth investing top dollar in.

Some things I would definitely consider passing on- their olive oil "blend" bottles might seem like a good deal until you read the ingredients. It is 98% canola, 2% olive oil. It is probably the only item that actually is a real rip-off of the tings that I have looked closely at.

These dollar stores are located in many business districts. Definitely not right on a main street, but within a nearby vicinity (like 1-3 miles). At least they are in my state. Dollar stores are never farther away than 10 miles max.

Daiso has a presence throughout Los Angeles, and it is definitely a different animal than your typical dollar store.

Dollar stores also exist in Canada (Dollarama and Dollar Tree), where my wife and I call them 75cent stores because of the conversion rate.

In the world where every store is trying to work you for whatever profit can be made, at least a Dollar Store is relatively transparent about what they're selling, and straightforward about it. And offering basics that people can afford.

I tried to find a plastic water spray bottle in Target, Walmart, etc. for spraying water on plants or like while ironing. Every option was a fancy-fied designer spruced up version for $8 looking like it was aimed at the "Real Simple" market. I could've bought a spray bottle full of sink cleaner for $3 and emptied it out for the bottle, and saved money.

At least you can go to the $1 store and find this and not get ripped off under the guise of "style and design for the busy mom" at 10x what it should cost.

Same for a plunger. Target only sold fancy ones.

I think the article oversighted that even dollar general has loss leader products. When I was a poor student, I remember practically living on $2 worth of 5-10 bananas and a gallon of milk everyday, it was the cheapest in my town and I looked.

You can be poor and still have a fair, unexploitative shopping experience at those stores.

Well, you can only have that experience because someone else is having an unfair, exploitative experience at the same store...

To know me is to know I am cheap. All dollar stores are not equal.

Everything in DollarTree is $1.00. That's not the case with the other two big chains. Not by a long shot.

A few weeks ago I was thinking about DollarTree economics as I drove down the Susquehanna Valley.

Seems like it collects pretty valuable data about consumer preference and demand in the absence of differential pricing. Campbells condensed Chicken Noodle or Tomato? One eight inch chef's knife or one six inch knife or two four inch knifes?

When I buy a knife and a can of soup and three picture frames, that combination is informative for merchandising a Kroger or a Walmart. There's a long play there.

Particularly because I might use a credit card.

Dollar General and Family Dollar are traditional retailers with no aversion to gouging the locals. They are slightly larger gas station convenience stores without the environmental problems of gas tanks and the real-estate expenses of space for pumps and busy corner locations.

The different purchasing power of US$ and CAD$ killed the "everything in the store is a dollar" model in Canada at least a decade ago. But Dollarama, which is so successful that it has pretty much squeezed out the other dollar store chains, has really just established themeselves as the "everything store" below the Walmart tier without any particular price - just low in general. Metal foil cookware, kids' party supplies and certain kinds of candy/sweets (I love their weird brand chocolate bars, particularly the "Island Bar" (Bounty clone) and Duoletta (Kinder Bueno clone). Also if you're out cycling they're a good place to buy things like Gatorade or chocolate bars for a reasonable price in quantity 1.

And sometimes a totally ubiquitous store with a predicatable inventory of crappy-but-adequate stuff can be a real problem solver. For example, hit the road with the small children for the long drive to Grandma's, and half an hour out we find that we have the fruit, but not the knife to cut it with. No problem, next Dollarama is 25 minutes away, we'll just grab a knife there. $2! With sheath. Sure it doesn't stay sharp as long, but it totally did the job.

Dollarama is everything for $4 CAD or under. They don't advertise this fact, but you won't find an item over $4.

When the pandemic hit, I switched my shopping almost exclusively to Dollar General, because despite the slightly higher prices compared to Walmart (sometimes) and Aldi (almost always), the number of customers in the store was always pretty light at any one time. I did still have to go to one of those places for things I couldn't get there (premium cheeses, premium meats). But, that became a once a month outing at most versus my weekly shopping trip, which turned from 20-30 minutes to 10 minutes in total, with less exposure to other humans. I honestly believe the Dollar General may have saved my health as far as COVID exposure risk goes.

Ah, I see, so they make quite a bit of their profit by selling smaller quantities of lower quality goods at higher per unit prices through framing the value proposition carefully and managing expectations to their benefit. Makes sense, given the markets they target, that they're exploiting the effects of the 'Boots' theory of socioeconomic unfairness and quite successfully too.

I realize the article mentions that sometimes happens, with their example being a 0.8oz deodorant. But as a frequent shopper it isn't my general experience. I often compare prices and on a unit cost basis (so controlling for the sometimes smaller dollar store quantities) you can almost always buy the same brand from a dollar store for a steep discount compared to a traditional supermarket or Target.

In general I feel like there's a tendency to view products marketed at poor people as exploitative. That's sometimes merited (payday loans!) but honestly, dollar stores are really effective at providing a good product at a great price.

>>That's sometimes merited (payday loans!)

That's also a very interesting discussion to have because from what I understand, payday loans businesses exist because the alternative is worse - people who are desperate will always borrow money from someone, so it's better that they borrow from a well regulated business rather than from the "pay or we'll break your legs" kind. And then the 1000% APR is argued that it's the actual cost of risk with these loans since they default so often.

At some point APRs really stop making sense for two-week loans. It's easier to understand what people pay in three parts: processing costs, a risk premium, and the lender's margin. Fordham Journal of Corporate & Financial Law estimated the margin at 3.75%.

The argument against payday lenders is a paternalistic one with moralistic overtones, with all the potential flaws that might entail.

Ever had a payday loan? I'm guessing no.

i'm unsure why this would make APR a better tool to understand two-week loans, or how it would make things less paternalistic

The process is pretty demeaning and profits are higher then you think. The lenders dilute the profits by opening stores all over the place. It's a competitive industry. APR is the accepted measure for loans, why should they break the standard and get special treatment?

The worse alternative is sleeping on the streets when you can't pay your rent. While I do think payday loans are evil, I recognize why they exist. I would prefer a much more robust housing support system for lower income people. Almost all of society's problems could be fixed with more affordable housing. For example let's say you have abusive parents, if affordable housing exist the moment you turn 18 you can up and leave. But now you have bizarro programs which will stop you from attending college if you get "affordable housing"( government subsidized). When I was young I was able to find a $600 apartment, on the free market. Now the same place is 1200$.

On the other hand, rent-a-centers are disgusting. I remember when I was a kid I had calculated they wanted me to pay something like $3,000 for a $500 laptop. But the idea is you only need to give them $50 a week. I went and saved my money and found the absolute cheapest laptop I could, paying cash for it.

On a larger level, car loans are also extremely exploitive. No one needs a car which cost more than $20,000, but all these shiny ads show girls will swoon over you, men will respect you, as long as you buy a car which is $75,000 + tax and destination.

Depends. I got a car loan for a modest car with 0.7% APR, I don’t see a problem with that.

My mother-in-law leases a new Toyota Corolla every few years; she gets trouble-free motoring at a reasonable rate.

Myself I have no idea how many miles I am going to drive next year (do I work from home? take the bus? do I drive to Montreal or North Carolina a lot?) so I buy a similar car and drive it into the ground.

Many of those luxury cars are leased, not loaned; the headline number ($/month) looks low compared to a loan on a modest car. You will probably need a lot of warrantee repair (a Toyota and a Cadillac are quality cars in their own estimations, but not in each other’s; if you need your car to start in the morning so you can get to work pick the Toyota.)

A Corolla is only $20,000, so that fits my point. But I have seen tons of people buying cars they can't afford, in order to impress people they don't like. The easiest way to waste tons of money is by buying an overpriced car

I've never paid more than about 3.5k USD for a car. Not sure what the second hand market is like in America but in NZ and UK you can get great cars for a fraction of the cost of buying new.

In terms of maintenance, I've had some that were troublesome, and some that needed nothing, it's a bit of a lottery in that regard. Most common problems are solvable with a few hours on your back in the garage though.

Possibly most interesting is that the value decay has already taken place at this point. Eg: buy a car for 2k, sell it 5 years later for 1.5k, as opposed to buying it for 80k and selling it two years later for 40k

The Cash for Clunkers program destroyed the used car market in the US. It's slowly recovering as cars from the 2000s and 2010s enter it.

the CARS program ran for 1 month in 2009. so it didnt affect 2009 and later model years. it appears to have increased new car sales in 2009 so it should positively affect the used car market in later years as those new cars moved to the used car market.

please explain how the used car market is "slowly recovering" 11 years later.

It took almost 700,000 of the most affordable cars off the market. That plus the reliability of newer cars means they stay with their original owners longer, so there are fewer used cars on the market at prices people can afford. Used car prices are still out of reach for too many people even before factoring in things like insurance and registration.

The floor price of a car that passes inspection is about what you say in the US but if you want a car for racing on a frozen lake you can pay less.

The $3.5k car is going to need more than $0 a month in repairs; the lease price includes that. If you like fixing your own car, get joy out of a unique car, don’t mind owning three VWs and having one run at any time the clunker can be a win. But if your clunker needs a $200 repair every month you might decide a payment and a reliable car is better for you.

Infotainment systems are in reverse gear but people underestimate the environmental and safety benefits of newer cars. There was that time I rolled my fit. I got lucky, but I didn’t even feel pain and the back window broke out so I even had an easy time getting out with the car wedged in the roadside ditch.

> I would prefer a much more robust housing support system for lower income people. Almost all of society's problems could be fixed with more affordable housing.

> When I was young I was able to find a $600 apartment, on the free market. Now the same place is 1200$.

The issue is that the overwhelming goal of politicians at all levels is to increase the value of individually owned residential units above the rate of general inflation. This is far and away the most popular form of welfare and impossible for any politician to oppose. It is also diametrically opposed to affordable housing so any and all affordable housing proposals are bound to be ineffective bandaid proposals.

If we want affordable housing the only way to get it is first lower the homeownership rate.

It’s interesting as well that the policies used (e.g., mortgage interest deductions) are almost universally considered bad policy by most economists. It’s rare to find such a consensus in economics, yet it’s such a third-rail that politicians can’t touch it

It’s “worked” for a very long time. Greatest generation through even some older millennials have been able to treat their homes like a self filling piggy bank.

It’s natural that there would be a lot of denial that this can’t go on forever.

I think from the economist perspective, it incentivizes the wrong behavior and ends up not helping those it was supposed to help in the first place.

For example, the tax deduction incentivizes people getting the biggest house possible to maximize the deduction. It also disproportionately benefits the higher income classes because they are able to afford more expensive homes. So from a perspective of helping more people become home owners it’s bad policy. It’s actually better at helping people who already are in a class that can afford homes just be able to afford more expensive homes. From that angle, it never really “worked”.

But so many people are accustomed to the benefit it’s virtually impossible to roll back.

California has made huge strides over the past year to legalize housing, so I have some hope that the winds are changing.

California's been too far gone for decades.

Literally no one but the rich, or those who like suffering should stay there. It's an absolutely beautiful state, but it's just so hostile to anyone who wants to have a decent life.

Don't people in the US use credit cards? If you are going to payback the money on your next payday, why not just use the credit and pay it on your payday?

Do stores not allow split payments?

People with bad/no credit can’t get credit cards (except secured cards, in which case you have to have the money upfront.) The Venn diagram between patrons of payday lenders and people with bad/no credit is a circle.

Also likely that such people who do have credit cards are already maxed-out to their limit and paying the monthly minimum?

> And then the 1000% APR is argued that it's the actual cost of risk with these loans since they default so often.

Isn't that a bit of a self-fulfilling prophecy?

I imagine they aren't defaulting because of the interest though - more that the borrower didn't even have the ability to repay the original amount at all.

Some of them - sure. But anyone who would've been able to repay the loan at a reasonable interest rate is still going to have an extremely difficult time with these APRs.

> buy the same brand

That doesn't mean they're the same product or quality, however.

I don't think a brand will change their recipe or reduce quality of components, when simply resizing is easier.

If they wanted to do that then they would be better off creating a different lower cost brand, rather than a new manufacturing process for $ store items.

Brands will offer a cheaper quality product with a slightly different model number in electronics though.

Worth it on higher end stuff not on $ store items.

This isn't correct. Big brands virtually never skimp on product quality for smaller stores because it harms the long term equity and value. They customize quantity.

These products are so well optimized now they're mostly margin and packaging/shipping/handling cost.

I doubt your toothpaste tube cost more than $0.50 in actual materials to make. And on a store this can go for $3? $4? (from a quick look in Amzn - approx values the cheapest one is $8 for 6)

CPG industry margins are quite public as almost big brands are owned by listed companies. They're not high. The highest margin categories for big retailers i believe tend to be clothing.

They're not wrong about the big difference between production cost and selling price. CPGs are basically in a war with eachother over marketing and need to spend the maximum amount possible to get you to but their $3 toothpaste over another CPG's $3 one and over a lower-priced generic. If they could cut their marketing budget in half, they would, but that would only work short-term.

Toothpaste costs $6-$8 in Amazon US? Holy cow.

No, it is ~$3 for a standard ~5oz size.

https://www.amazon.com/Crest-Complete-Whitening-Toothpaste-T...

Amazon is more expensive than Costco/Walmart/Target, but especially so for dense, heavy items like liquids (or toothpaste).

At least clothing manufacturers do skimp on quality for downmarket sales. It used to be that clothing at "outlet centers" were literal overstock items, but as they've become more popular, clothing makers now have cheaper, lower quality clothing made especially for sale in outlets.

Similarly in the UK, whilst there are certainly £1 store offerings from brand names which are smaller than their traditional supermarket offerings, the vast majority of products are end of line or bought up cheaply in bulk where they otherwise we're not selling. I have had success in the past finding items which I have resold on eBay for significantly more because their true value is higher.

Definitely! Dollar tree is the place to get things like dishes and cleaning supplies. You get the same bottle for $1 that is 1.88 at Walmart or whatever. I'll only buy things that the dollar store I KNOW are cheaper though, sometimes you'll think you're getting a deal and then the same product at Walmart is 90 cents.

The data presented suggest that poor, uneducated (innumerate) populations of consumers try to find most of what they need at one store and do not calculate price per unit (PPU).

Or if the poor are aware of PPU disadvantages, they have a sense that shopping elsewhere isn't worth spending more time and energy.

So the $DiscountFranchise just needs to be able to locate itself as close as possible to the socioeconomic-target population.

Go and run around city looking for some widget. You will spend more on fuel/public transport.

In case someone wonders about Boots theory - https://samvimesbootstheory.com/

There's a lot of equivalent store types in Asia. The Kirana stores in India, the Sari-Sari stores in Philippines, the neighborhood groceries in much of South East Asia etc. A very similar dynamic applies - the shoppers buy several times a week, maybe even every day because they're daily or weekly wage earners.

Bodegas in NYC make no pretense about being a good deal. It’s understood that you are paying for convenience.

They also "bulk up" food products, for example introducing filler into meat products such as water and salt [1] such that they can sell a smaller amount of meat for the same price without the consumer noticing.

[1] https://www.youtube.com/watch?v=ONOoKtAH53E

I personally always considered the "general" stores, and considered Dollar Tree the main "dollar" store out of the bunch. I think these stores are super interesting though, because, growing up in a town with a Walmart and Target, there was no reason for me to go to a Dollar General. However, when my friends and I would go camping, the only store for miles and miles would be a Dollar General, and it was relatively booming. The stores aren't bad by any means, but limited and a bit more costly, but I get an odd feeling of coziness if they're the only real store in town.

The article mentions they'll have to get creative when inflation makes the dollar worthless, or do a little rebranding.

Motel 6 did the same thing. I remember when the 6 meant six bucks a night. It was a great place to catch some Zs when on a road trip.

My dad said the "Nickle Bar" candy bar's size grew and shrank with the cost of chocolate.

In the UK we have poundland which is the same idea. To be honest I love it. I get protein bars, chewing gum, cans of coke, milk and sweets cheaper than anywhere else.

From what I understand, a lot of the Poundland goods are grey market parallel traded goods. e.g. Colgate toothpaste manufactured in the UK but intended to be distributed in Poland. The manufacturer often sells them at a lower margin in lower income markets because some money is better than none.

Sometimes the foreign-language packaging of an otherwise-familiar brand item makes this really obvious!

I have fobd memories of Poundland, 99c and Home Bargains while living in the UK as a poor international student (poor meaning I lived with a scholarship from my country).

Interesting; most stores are similar or same brands in Canada vs USA (with noble exception of Tim Hortons). But we have Dollarama and Buck Or Two, whereas top US are completely different.

I wonder if it's because Canadian supply chain logistics tend to be different (Target famously flopped for not taking that into account), or some other factor.

Dollarama also doesn't accept returns. Not sure about the US stores, but that is another reason why they must thrive.

Loonie Toonie was a pretty entertaining name for one. I didn’t get it at first when I visited.

The article itself is quite interesting: short, simple sentences and many colorful graphics. It looks like it could be from a middle school textbook. But the content itself is not simplistic.

Is it intended for a segment in which this is common?

A dollar store owner explained it to me more or less as: they're the last stop before the dump. It's like how bill collectors will buy up debt a company has given up collecting themselves for pennies on the dollar.

Ahh. Does this mean that the meat that can be found in some dollar stores finds its way there as it's last stop before becoming animal meal?

Does not surprise me one bit.

I think grocery store throw-aways are on a different supply chain. There are stores that sell the old bread from grocery stores. I assume there are stores for meat that's still good but past what the grocery stores stock.

The Dollar Tree in my town actually has expired bread products from Bimbo bakeries (Thomas' English Muffins, Brownberry, etc).

The english muffins are a pretty good deal for $1, considering it's $4+ in the stores.

Dollar stores are fascinating as they are the final piece of the puzzle in the long journey of organizing mass produced consumerist society. This started more than a century ago with the invention of (high end) department stores [0].

The end result is hardly satisfying (or stable): an unstopable stream of plastic pollution, toxic levels of sugar and a reliance on cheap labour in remote lands. All those factors are coming under scrutiny and pressure...

[0] https://en.wikipedia.org/wiki/Wanamaker%27s

One thing I noticed at our local 99 cent store, and didn’t see mentioned in the thread… cashier wait times. There’s a large number of customers of course and they keep costs down with fewer cashiers. So you are looking at twenty minutes standing in line for your $8 in goods.

I did this a few times and (combined with needing to drive there) and decided it was not really worth the savings from our quick/overpriced markets in walking distance, except in rare circumstances. YMMV.

a similar store near me replaced their 2 checkouts with 5 self checkouts, and has one person nearby to help/monitor.

Funny, because our expensive store did that, but the dollar store may not have the upfront capital for it.

I've seen some super large dollar stores that are making lots of net profit. Just because the items are cheap doesn't mean the net margin is small, because the items are cheap to buy too, and they're chains that buy large quantities often directly from a manufacturer to get the best price they can.

I think it just depends on what the net improvement is. If they had two checkouts before, that each required a person, and they replace it with 5 checkouts that now require just one person, the cost per person-checkout is 20% of what they were paying before. The machines themselves might be leased or otherwise amortized over significant periods giving a cheap cost per year. If lines of people are waiting for checkout that might mean a much improved experience.

> Dollar stores do this by going after the stuff nobody else wants: surplus items, discontinued products, and old stock that didn't sell well elsewhere.

My experience with Dollar Tree suggests additional methods:

* Smaller amounts of product in package (like the article mentions elsewhere).

* Substandard product. I've gotten everything from Sunbeam batteries, to name-brand envelopes that were obviously thinner than the same brand I'd bought elsewhere (to the point that my printer wouldn't even feed them), to criminally non-sticky fake "duct tape". I've also seen things that are obviously too small (lower cost to manufacture), like car window shades.

* Packaged food imported from outside the US, even with popular US branding on it.

* Prices in some cases the same or higher than another store nearby (e.g., $1.00 for a can of food available for $0.89 or less, within walking distance).

Before Covid, my favorite thing to buy there was Hefty brand zip-seal plastic bags. (I avoid Dollar Tree for things that go into or on the body, but the bags are fine for purposes like organizing non-ESD small parts, and providing some dirt and moisture protection of things in backpacks.)

Dollarama is by far the best one. Super popular in Canada. Things are around the $4 mark. Surprising good enough quality for some things. Clean and well organized store.

When I was younger, every single Dollarama item was priced at exactly $1 before tax (prices inched up to $2 for some products a decade after, but the majority of items were still priced at $1). On average, the quality of most items ranged between passable and decent. Most university students I knew bought household items from Dollarama and for the most part it would be fine. I find that Dollarama is just more mainstream in Canada than dollar stores are in the U.S. You would find Dollaramas in mall basements and other medium rent places.

The key was to have some idea of the quality floor of the product one was buying. Winter mittens for example. Unless you really try, it's hard to make winter mittens that suck -- there's just not that many ways to go wrong. I still have mine from a decade ago and they're fine. I still wear mine in the winter.

I am shocked that dollar stores exist in 2021 given all the inflation that occurred in the last few decades!

A testament to the world’s supply chains and manufacturing automation :)

A question I have always wanted answered:

If the plural of Attorney General is AttorneyS General, is the plural of Dollar General: DollarS general??

No. “Dollar General” is a trademark/proper noun, not a common noun. When pluralized, trademarks are typically paired with a common, pluralized noun since one is typically referring to the mark’s owner entity. “Dollar General stores” “Dollar General brands”

Common nouns with postpositive adjectives, in US English, have the noun pluralized: attorneys general, sisters-in-law, courts-martial, professors emeritus, accounts receivable.

This is interesting. Well written/compiled. All sorts of things to be interested in.

One noteworthy point is how much frames matter. Adjusting quantity (eg small old spice bottle) instead of price makes a big difference in how things play out. It makes everything different.

Another point is returns to scale. Economies of scale are long known and highly observed. Things like "buying power," oligopsony and such were documented as Wal Mart came up. I think there's more to be said on this. Winner take most is a transformative curve. Where's it heading? Is it even bad that markets are structured this way?

I suspect this oligopoly's biggest long term competitor is AliExpress. As the author notes, the key element is being a good, opportunistic buyer of cheap goods. A lot of things come down to mail/delivery systems. I think we're at a point where actual delivery infrastructure will start to be built. How it's built matters.

It’s expensive to be poor.

On the contrary, we should appreciate that every single item in the dollar store is a marvel of modern economies of scale that benefits all customers, poor ones most of all.

Show a modern dollar store to a Soviet Russian in 1989 or anyone from 100 years ago and they’d go nuts.

You’re never gonna get anywhere with that argument unfortunately. The hedonic treadmill is too quick and everyone you’re responding to grew up taking all of these modern miracles for granted. I remember what buying snacks was like growing up in China in the early 90s.

You brought your own rice and a dude on the side of the road would pop it for you in a lead pipe.

We shopped at dollar stores after landing in the US and it was mind boggling.

Not with the inflation since 100 years ago.

Why 100 years? Soviets were around as recently as 30-ish years ago. Also inflation makes it even more impressive, if we look at the goods you can get relative to what you can buy with a median hourly wage.

That's not my point. Yes, someone poor benefits greatly from a dollar store, but they're paying a premium that someone that is more wealthy does not pay because the wealthy person can take advantage of economies of scale: a wealthy person can buy 100 rolls of toilet paper for $50 where a poor person can only buy one roll for $1.

This extends beyond just the dollar store. A wealthy person has access to a vehicle which allows them to go to Costco that is 10 km away. A wealthy person has storage in their home to house the discounted goods they buy. A wealthy person has access to financing and financial investments that a poor person does not; you cannot buy a portion of share of stock.

>you cannot buy a portion of share of stock.

Robinhood (and other many other brokers) support fractional shares

The article had good points, but it misses one opportunity for businesses that see value in this model: marketing exposure.

If I were someone who wanted to try a brand and do not want to pay big upfront, I will start here and then buy in bulk later if I am satisfied.

Yes, some established brands sells their leftover inventory (brand impression as a side-benefit), but I have also seen some unknown, generic brands start over at dollar stores and then disappear off-shelf.

My hypothesis is that they either failed, or were testing the market/demand (cheaper shelf space?) before selling to more traditional retailers, but I am not sure this is the case. Need an insider to understand the logistics.

Aside from that, there are some really good deals that gets rid of branding/bs, that adds cost to the product's price - sometimes, without much added value or quality difference.

Family Dollar operates a store near me in Atlanta. Their parking lot is so filthy sometimes the neighbors organize to go clean it up.

It appears to me Family Dollar hates their customers given the food choices, the attitude of the employees and how they maintain their property. I avoid them all.

I've been struck by how ugly some stores catering to the poor are. Not ugly because they are cheaply decorated, but intentionally ugly, using things like black on yellow coloring for signage, etc. I guess it's eye-catching, but not in a good way.

Or maybe to signal "yeah, we can afford to shop here"?

Like, my dentist's office is really nice. Not just clean, but very nice. I seem to be the only one in our family that realizes that we're the ones that paid for that. Better than charging the same amount for a dumpy office, but makes me wonder how much we've been overpaying.

Even a fancy restaurant will follow the 5second rule in the kitchen, but it will be a nicer floor they're picking it off of. (I never understood granite countertops... they're porous! The last thing you'd want in a kitchen).

> (I never understood granite countertops... they're porous! The last thing you'd want in a kitchen).

https://www.easternsurfaces.com/seal-granite-countertops/

They do have a downside. See https://www.propublica.org/article/how-dollar-stores-became-...

I do use Dollar store to buy stuff that is just pretty much disposable such as Balloons, birthday decorations among others. I can say that food is pretty bad and not healthy. Very similar to Iceland supermarkets here in UK

Huh. Was expecting to come away from the article with "like McDonald's, they're basically a REIT" but I guess they make decent profit on that stuff.

dollar stores are essentially a predator on the lower to middle class; and marginalized communities. also these stores are notorious for only carrying highly processed items, not exactly the best diet to feed your family on.

also, for those $1 toys they sell I bet the source of manufacture is dubious at best. if the nike sweatshops are bad, I can't imagine the working conditions for a dollar store sweatshop are any better.

> Today ~34k pepper the US landscape... On average, a new one pops up every 6 hours

The 6 hour thing can't be right, can it?

Why is this "article" a bunch of images of text with charts interspersed?

Dollar tree is the only remaining true dollar store. I don't know why people count the others.

ahh dollar tree, where we go for birthday party favors for little kids

Don't even hate on my dollar stores (coworker made a mint on the Dollar Tree IPO... Grr!;)

Okay, good.

There have been numerous agenda (economic? class superiority?) articles about "dollars stores: bad." Somehow that they're racist or responsible for food deserts, poverty, crime, and your grandma yelling at the cleaning lady.

It's fascinating how the coverage map is so drastically different from the typical US population map. In particular, they completely cover the east half of the US, but not the west.

Drastically different? It looks almost identical to a map of the U.S. where each dot represents a town: https://www.visualcapitalist.com/mapping-population-density-...

Give them time. They will eat the entire country.

https://www.youtube.com/watch?v=DIqC5y1zm-4

There does seem to be an opportunity to bring the same type of store to the western states but the low population portion in the interior west might keep it from being economical to operate distribution centers that incrementally cover over more and more western territory. They'd need to invest in a distribution network in the western states that were mostly independent from the eastern ones. That might be too much risk for their low margin business model.

Uh, it seems like it tracks a US population map pretty well. The Western half of the US is largely pretty sparse with only pockets of densely populated cities.

https://commons.m.wikimedia.org/wiki/File:US_population_map....

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