Everything’s a dollar! Candy – food, food – stationery, stationery – toothpaste, name it and they have it, all under a dollar. The Dollar Store, Dollar General, Dollar Tree, Costco; within every mile, near every gas station you can find a huge building with a dollar sign in some cases a 99 cents.
Dollar stores are taking over America, despite the retail industry crumbling, all the one-time giants like Sears and Kmart closing down and some are exiting altogether. But stores like Dollar Tree and Dollar General are excelling in this uncertain retail environment with consumers demanding every possible product at the lowest possible price. These dollar stores have a tendency to open up near the traditional retail stores which makes them a major threat, as they sell the same versions of products at ‘deep discounts’ making them comparatively very less expensive to the ones seen at the regular retailers.
Counting over more than 30,000 stores, most ‘target’ locations in the middle-class neighborhood, they are located in areas where there are people with a median income band ranging from $50,000 to $75,000, yet, many even target the families with lesser than $50,000 of income. But this in no way means they aren’t inclusive of the upper class, basically showing that there is no room left for traditional retailers.
But the main issue is not a threat to the traditional retail stores, without putting much thought one might say, though they throw off the big retail stores, they do help the poor; or, do they?
The truth is that these dollar stores are thriving by crushing the poor, they are rising by ripping off of the poor. Even with online retailing totally changing the face of American commerce, dollar stores are still prospering just fine while opening more and more stores every year.
“If you’re budget-constrained, then you make choices that are not optimal,” says Professor John Strong, a dollar-store expert at the College of William & Mary.
Customers tend to neglect the cost of travel while considering the effective cost of the products, barring that, visitors to dollar stores who are in the poor to a middle-income category are actually paying more than the well-off who shop elsewhere.
Let us see how the poor cheat themselves by deceiving their minds through the pricing policies carefully chosen by these dollar stores,
The bags of flour at a Dollar Store in San Francisco cost only $1, but they also only weigh two pounds. Most bags in the supermarket are five pounds and can be scored for less than $2.50 at cavernous retailers like Walmart – though these require time and, often, a car to access. Dollar store raisins are only 4.5 ounces. At a big box store, however, 72 ounces of raisins cost $10.50 – meaning dollar store customers are paying 52% more!
Cartons of milk at a dollar store are only 16 ounces – which prorates to $8 per gallon, more than what one would pay for even top-of-the-line milk at Whole Foods.
With more and more dollar stores opening every year, it is a steep downside for the residents in those areas. In cities, dollar stores trade in economic despair, with many residents saying they are a vital source of cheap staples. But as the store clusters in low-income neighborhoods, their critics worry they are not just a response to poverty — but a cause. Residents fear the stores deter other businesses, especially in neighborhoods without grocers or options for healthful food. Dollar stores rarely sell fresh produce or meats, but they undercut grocery stores on prices of everyday items, often pushing them out of business. Apart from cities, these stores have gained attention as success stories in the country’s most economically distressed places — largely rural counties with few retail options, putting stress on areas where no other retailers will venture, a potential danger to their inhabitants.
Yet, dollar stores are a staple in rural America. While Walmarts and other supercenters attract shoppers from miles beyond a small town, Dollar stores fill the gaps in between.
“We saw an opportunity,” Dollar Tree’s co-founder Macon Brock wrote in his 2017 book One Buck at a Time. He stated, “When a customer walked into our store, she could shut off her brain. She didn’t have to think, didn’t have to calculate how much she was spending. All she had to do was count – ‘One, two, three, four, five, six. I have six items and I have six dollars. I can buy this.’”
Dollar Tree bought Family Dollar in 2015. Together, the chains operate more than 15,100 stores across the United States and Canada. It plans to hit 26,000 stores. Dollar General operates more than 15,200 stores. Seventy percent of the company’s existing stores are in communities with 20,000 people or less. In 2017, the company notched its 28th consecutive year of positive same-store sales growth. And it is expanding rapidly. In 2009, Dollar General opened 500 stores. In 2017, it hit 1,315 new stores.
‘Dollar stores aren’t a response to chronic poverty, but an instigator.’
It ain’t just customers and competitors having the wrong side of the stick, but even the employees, these stores cut down further on costs by having bad employee policies, poor working conditions, harsh work rules and more than often are these employees left underpaid and overworked. Customers, they have to make the decision for themselves. Do they wish to be a part of a trickery, just have a momentary psychological satisfaction of spending just a dollar on an article or rightly calculate their economic benefit and act on it.
Get The Connectere directly in your E-mail inbox !
A free spirited individual in her second year, pursuing Bcom.(Hons) from Shri Ram College of Commerce, she is an extrovert who loves learning more and more from everything around her, fueling her motivation to do more to be a better person with every passing day. A classical dancer since the age of 4, a music lover and most importantly someone who is passionate about helping others and creating a positive impact on the society.