Family Dollar to close almost 1,000 stores
nbcnews.com
nbcnews.com
https://corporate.dollartree.com/news-media/press-releases/d...
The thing I don't like about these stores is IMO they take advantage of poor people who think they are getting cheaper products, but in many cases, especially for food items, they're paying more. A gallon of milk was $3.50 last time I went to one, whereas it was $1.89 at Meijer. Of course, Meijer does the same thing: if you buy milk at their gas station store, it's also well over $3, but inside the store it's under $2.
People trying to save money would be better off shopping at Aldi IMO, because Aldi doesn't have 5000 kinds of orange juice or paper towels. They have one kind and the price is usually reasonable, whereas the large grocery stores play all kinds of games intended to cause people in a hurry or with limited time or ability to compare products, to choose the wrong thing and pay more.
It doesn’t make a lick of sense for them to take their car (???) and drive over to Costco to buy a 12 pack of paper towels that will be lying around for a year or two because it’s technically cheaper per unit.
For all this talk of the poor being exploited I think people grossly underestimate in general how wise the poor is with their money. They don’t have much of it so they have to think hard about how to spend each dollar.
However, one of the best things you can do to save money is identify waste, which sometimes means buying a smaller more expensive (per unit) item than a larger and cheaper per unit one. There's no reason to buy a gallon of milk if you always throw away half.
The fact that some items are overpriced is part of the game they’re playing. It’s asking the customer “are you really going to wait in another lineup to save a buck?” It’s also taking advantage of the fact it’s cognitively difficult to memorize the price of each product in both stores, especially because the prices change and the size of products is often different, so it’s easy to get confused and overpay. Yet they aren’t really taking advantage of customers any more than Walmart is when they throw a sale and puts their best value items at the back corner of the store forcing their customers to walk past worse value items.
It’s also simply the case that Walmart simply has less overhead and can pass the savings on. Not to mention more negotiating power.
Around here, the cheapest milk by far is a gas station - which is obviously doing it intentionally to anchor them as "the place to get milk on the way home". Other items are way higher priced than a grocery store, and their goal there is to "have it when you want it".
There are a few exceptions (nothing I've found beats their helium balloons, if in stock). But dollar stores are everywhere.
Or storage space, or Costco membership, or personal transportation
2. Don't have enough capacity to eat stuff quickly (single people, small families)
3. Don't have ability to preserve stuff (don't have a full kitchen, maybe not even a refrigerator, maybe live in their car, etc)
4. Don't have the ability to get anywhere else
5. Not everyone "poor" is stupid - some people just want to buy Velveeta Cheese and pay a lot for it, for whatever reason, instead of whatever Aldi is selling.
etc...
I'm growing tired of this idea that everyone "poor" is dumb. The median "poor" person isn't much less intelligent than the median middle class person (and probably upper class for that matter, too).
> The thing I don't like about these stores is IMO they take advantage of poor people who think they are getting cheaper products, but in many cases, especially for food items, they're paying more. A gallon of milk was $3.50 last time I went to one, whereas it was $1.89 at Meijer. Of course, Meijer does the same thing: if you buy milk at their gas station store, it's also well over $3, but inside the store it's under $2.
It's stating that poor people are being taken advantage of - not that they have different circumstances and these stores actually serve them - otherwise, they wouldn't exist.
It's implying that all of us on HN are too smart to be taken advantage of and shop at better stores.
> They have one kind and the price is usually reasonable, whereas the large grocery stores play all kinds of games intended to cause people in a hurry or with limited time or ability to compare products, to choose the wrong thing and pay more.
Just because you shop at Dollar Family doesn't mean you're dumb and being taken advantage of. Or that you're not smart enough to compare products. It means you (likely) have different preferences (for maybe unfortunate reasons).
Dollar Tree and Aldi are both trying to make as much money as possible off of their customers.
This only makes sense if you think poor people are dumb or naive. They don't know how to compare prices?
As other people have mentioned, sometimes the value is the amount you can buy. If your personal financial margins are small, it is okay to spend more per oz on a single bar of soap because it is the difference between having soap vs not.
We shouldn't assume cost per unit is the only value a store provides.
I wouldn't go so far as to say "dumb or naive" as we're all susceptible to dark patterns. But the Dollar stores definitely prey on people this way. They have specially sized packages made for many products to make comparison more difficult.
It’s no secret that it’s a terribly fast way to burn cash but a downward spiral of depression from being poor -> ordering food because you’re too depressed to cook -> depression from being poor can occur. Mind that I’d advise such people hoard frozen dinners and save a whack of cash, it isn’t quite the same.
I honestly think that poor people can even UNDERESTIMATE how valuable debt-fueled DoorDash and Uber usage is if they expect upwards economic mobility in the near future (Students) since it’s one of the better time/money tradeoffs they can do.
A poor person might not be that clever and might not have much time and might make a bad decision the first time they visit family dollar and get conned by watered down soap and subpar goods and food in unusually small portions. However when they shop there for YEARS they do eventually find the time to figure out what the deals are. When these stores have tons of poor people being loyal customers for years it indicates they’re doing something right.
Its pretty hard when each thing is served in a different size container and it can have different values from the most important ingredient. This is sometimes pretty easy to figure out (e.g. juices usually have the same 2-3 sizes where I live) but sometimes its practically impossible to know whats the best value for money, e.g. paper towels -- size, number of layers, number of sheets, total length etc are all the parameters that one should consider. Or bring a precision scale?
I would say ALL consumers are not consistently logical / will make choices that aren't in their best interest.
We don't necessarily do a cost/benefit analysis of all these options, which is why we can have irrational preferences, but that doesn't mean we don't think about it at all. Irrational just means it's not optimal, it doesn't mean it's the actual worst choice.
I was curious so one day I was at the more expensive store (I like it, they have good stuff) and I took some photos. I then went to Aldi and took some photos.
Without commentary I posted the photos from the expensive store, but only of items that were actually less or equally expensive than Aldi on that day. People ranted about the prices being high at the expensive store and shared that "That's why I shop at Aldi."
People are weird.
It's unethical that other grocery chains don't provide chairs for their cashiers.
Most people are physically harmed by standing on hard floors for 8 hours a day. There is no conscionable reason for doing this to your workers.
Unethical is an apt word. If I see cashiers seated that’s a place I want to shop. It signals that they care about their workers.
Keep in mind that "standing" in this case means standing in one place on a hard floor. If you're comparing to the typical tech worker standing-desk setup, most such workers have done a lot to get the ergonomics of that setup correct, i.e. getting surfaces and screens at the right heights and adding a pad to stand on, whereas the ergonomics of a cashier station are geared toward the customer, not the cashier. You could address this partly by adding pads to standing surfaces.
There's a larger problem here though, which is that the evidence behind standing desks being beneficial is... not good. There's lots of evidence that sitting is bad, but only in comparison to not sitting. That hides the fact that "not sitting" includes a lot of different kinds of standing--walking around is not the same as standing in one place. What studies we have of standing desks document back and leg pain as a possible side effect, and that's usually the best case of standing in one place. If there are any studies of standing in one place on a hard floor for hours, I'm not aware of them, but I'm not convinced that particular case of "not sitting" is much better than sitting.
In short, the problem with sitting is probably that you're not moving, not the particular position in which you don't move.
Talk to your cashier, ask how long they've been working there and if they experience pain from standing, and with the exception of new employees or employees under, maybe 25ish, I can almost guarantee the answer will be "yes".
Everywhere else with standing cashiers that I know of (besides banks, which more and more have stooled or sitting tellers) have a mat to stand on and will bag.
The cashiers at the Aldi near me bag the items from a seated position. There's a "lazy Susan"-style rotating platform with 3 bag dispensers on it. They place the items in the bag and facing the chair they're in, and when the bag is full, rotate the platform to face the full bag toward the customer.
There's also usually someone else on the floor to help if a customer needs help placing the bags in their cart.
How old were you? Keep in mind that younger people are able to adapt to physical stresses.
> its probably a lot healthier...
That's not in evidence.
But I do agree, aldi is pretty incredible. Most of the people shopping at my local Aldi are definitely more well off.
Anything we want that we can't get at Aldi (local items, good BBQ sauce, less popular stuff) we'll make a special trip for.
Never for food.
Oh and now that im older and I need lots of reading glasses - its GREAT for 1$ reading glasses - so now they are scattered all over the place so I am pretty much always within an arms reach of them.
If I break them, its fine - but thats a great use of these stores.
--
@margalabargala : True - but sometimes I only need a little bit. I dont use very much tinfoil... aside for my Hat Collection... but thats not what we're talking about. Can see some ID?
It's fine if you truly know you'll never need more, but it's not like aluminum foil ever goes bad. Most of the time you're better off spending the extra dollar for 10x as much.
That can't be healthy for any population.
I avoid these stores on principle now, even for things where it makes sense to go to a dollar store.
Edit to reply to post below due to posting limit:
The people choosing to shop at the cheaper store are also benefiting, otherwise, they would not have switched from shopping at the higher priced store.
> The people choosing to shop at the cheaper store are also benefiting, otherwise, they would not have switched from shopping at the higher priced store.
The strategy is as follows:
- Move into small town that can only support one store.
- Undercut existing store, using corporate resources to stay afloat while doing so.
- When other store closes, raise prices.
- Enjoy your monopoly position that's near-impossible to disrupt due to town not being able to support two stores.
Yes, you are correct that some consumers briefly spend a couple of months benefiting from lower prices during step two. The raised prices in the years following make up for that, not to mention the decrease in quality and variety, and the destruction of the town's local businesses, speeding the demise of the town.
My contention is the cheaper store’s success is not the root cause, the cheaper store’s success is the symptom of a sufficient portion of the local populace losing purchasing power.
Well, then the first dollar store can lower prices to prevent that. Doing this requires a large war chest. The store needs to take a loss for months to years until its competitor dies.
A Dollar Tree or a Dollar General can do this easily against a locally owned store. But once a Dollar Tree has moved in, a Dollar General won't, because both companies have the resources to back an individual store indefinitely, and neither will make any profit. So there's no use. Having one corporate-owned dollar store in a small town is a very stable minimum.
> My contention is the cheaper store’s success is not the root cause, the cheaper store’s success is the symptom of a sufficient portion of the local populace losing purchasing power.
Completely disagree. The cheaper store's success is a symptom of abuse of the market by a larger company. In places without discount stores, people get along just fine, and in fact protest against the opening of such stores in their town. These stores don't open stores in places where "the local populace has already lost purchasing power" and are seeking somewhere new to buy things, they open stores in places where they can create and enjoy a monopoly position due to the relatively small size of the local population.
This isn't something you'd see in an urban area. But there are countless examples of this happening across Eastern Oregon or Nevada.
Such towns only have the population to support one grocery store, usually a locally-owned store that's been there for a very long time. Then a dollar store moves in, takes advantage of the size of the parent company to take a loss for a few months/year until the local store is driven out of business, and then is able to sit on a monopoly for food for that town.
Such stores destroy communities. The only people benefiting in the above scenario are the dollar store's shareholders.
Now if the store was in a rural area with little competition that would be one thing, but this store was in a city where you could walk across the street to a Kroger.
If Family Dollar is not lower margin I'm not sure what is. My guess is they have mostly lost out to internet sellers and Walmart.
For this reason (cashflow) they are seen as a good option for poor people, where in reality everyone would be better served by Costco if they had the cash and storage room to buy in bulk, and a car.
I’m wondering if Dollar General is what’s really hurting them. I hear people talk about Dollar General all the time, but almost never Family Dollar. DG seems to be the Walmart of the dollar store game.
Dollar General has a few things going for them in these areas:
1. They seem to have very low staffing costs. Most stores seem to have at most 2 workers on staff at a given time (obviously this is higher in busier areas).
2. They seem to have no compunction about putting stores in pretty remote locations (example: [1]). This is probably enabled by having low staffing costs--a store doesn't have to make huge revenue if its costs are low.
3. They seem to have a very standard formula for new stores, which allows them to build them quickly. I've seen a flat lot with trees starting to grow in it, go to an open Dollar General in approximately 9 days. I can't imagine what sort of feats of organizational engineering allows that, but it has to be an advantage because it allows them to pivot into an area quickly. And I would imagine the non-descript buildings are fairly easy to sell, allowing them to pivot out of areas quickly as well.
4. Their competition in remote areas is usually gas stations. While DG isn't cheap compared to Walmart or Aldi, they're often about 2/3 the price of gas stations for a lot of items.
That's the entire point! They have the basics with few options for each type of product. It's not luxurious but it's low stress and inexpensive...exactly what many people want/need.
Little reason to be shocked on why their business model isn't working...
https://www.youtube.com/watch?v=p4QGOHahiVM (Last Week Tonight with John Oliver)
https://www.youtube.com/watch?v=vQpUV--2Jao (Wendover Productions)
(Joking of course)
HN may often be technology focused, but it isn't a requirement.
A big part of HN is business