When they were competitors, before the merger in 2015, they built stores next to each other. Rite Aid did the same thing with Walgreens drug stores. Then after the merger, they ended up with redundant stores in the same location. Duh!
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.
The misconception about dollar stores is that they sell cheaper products. However it’d be cheaper to buy almost anything per unit at Costco. Dollar stores provide a service when they sell the same products but smaller sizes, which makes it easier for people who don’t have enough cash to buy stuff.
Costco has a higher income cachet, there’s a reason Charlie Munger adored it so. When you’re living in a 100sqft SRO and walking for your groceries the value of the dollar store is more obvious. Because it’s a STORE for the things you can’t fit at home that is near your home, which sells items in small quantities. The entire dollar store model is many locations and small footprint.
It doesn’t make a lick of sense for them to take their car (???) and drive over to Costco to buy a 12 pack of paper towels that will be lying around for a year or two because it’s technically cheaper per unit.
For all this talk of the poor being exploited I think people grossly underestimate in general how wise the poor is with their money. They don’t have much of it so they have to think hard about how to spend each dollar.
All that is true, but the dollar stores (perhaps more correctly called convenience stores?) have issues, too. Ours is literally across the street from a Walmart, and many items are priced higher than Walmart for the exact same size.
However, one of the best things you can do to save money is identify waste, which sometimes means buying a smaller more expensive (per unit) item than a larger and cheaper per unit one. There's no reason to buy a gallon of milk if you always throw away half.
When I’ve been poor and seen this happen, I tended to shop at both stores because some items at the dollar store are actually cheaper. Just like many grocery stores have rotisserie chickens sold under cost, the dollar store has its own anchor items like the balloons.
The fact that some items are overpriced is part of the game they’re playing. It’s asking the customer “are you really going to wait in another lineup to save a buck?” It’s also taking advantage of the fact it’s cognitively difficult to memorize the price of each product in both stores, especially because the prices change and the size of products is often different, so it’s easy to get confused and overpay. Yet they aren’t really taking advantage of customers any more than Walmart is when they throw a sale and puts their best value items at the back corner of the store forcing their customers to walk past worse value items.
It’s also simply the case that Walmart simply has less overhead and can pass the savings on. Not to mention more negotiating power.
Yep - there's all sorts of trade offs, and just because one company doesn't do the ones you'd like in that case, doesn't necessarily make them evil.
Around here, the cheapest milk by far is a gas station - which is obviously doing it intentionally to anchor them as "the place to get milk on the way home". Other items are way higher priced than a grocery store, and their goal there is to "have it when you want it".
Costco is only cheaper if (a) you will always use the full amount of product before it spoils or you no longer need it and (b) the cost of traveling the extra distance and spending more time shopping is lower than what you save on the purchase itself. It's not the case that these are both satisfied for everyone.
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.
> The thing I don't like about these stores is IMO they take advantage of poor people who think they are getting cheaper products
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.
> This only makes sense if you think poor people are dumb or naive. They don't know how to compare prices?
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.
I do know a lot of poor people and they are actually extremely financially dumb and naive. They do not know how to compare prices per unit of measure. They do think the dollar store is cheap. They did have a goal of not using DoorDash for a month because their addiction is so bad. They will DoorDash fast food because they are too lazy to go pick it up.
DoorDash has more value when you’re poor because you are less mobile, and more generally are less likely to have a well outfitted kitchen, and I see a lot of younger people who are inexperienced cooks using it.
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.
I've known poor people (heck I have been - and compared to some here no doubt still are - poor people). The ones who are not dumb, end up being not poor eventually, even if not rich.
Poor people have less time, and also worse access to good educations. Stupidity is not required.
“Sometimes the value is the amount you can buy”
Sure, but on a systemic level we can still see the issue, i.e. that being poor is expensive.
Price comparison is mostly basic arithmetic, combined with maybe a touch of nutritional knowledge. Hardly something you couldn’t master with a middle school education.
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.
> This only makes sense if you think poor people are dumb or naive. They don't know how to compare prices?
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?
True, but I think most consumers aren't obviously "dumb". Most people past 3rd grade can tell that $4 for 1 gallon is cheaper than $2 for 1 quart. It gets trickier when it's not a direct comparison though... would you rather drive 20 min farther to save the $4? Probably not just for that one item, but if you are buying a large amount then the answer changes.
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.
Perception is a strange thing too, and I think greatly distorts when people do make comparisons. On a forum about my local area it became a common thing for folks to go down to the expensive grocery store and post pics of the most expensive thing (usually pre-preapred meals) and rant about how expensive it is at the expensive store.
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."
Then everybody cheats on size/weight/count. Used to have inspectors (Reagan abolished that?) so now we just trust the manufacturers. The predictable result: creeping size/weight erosion.
Yes, I know grocery chains which harassed their cashiers to stand because of customer complaints even when they had a doctors note and were suffering from real physical ailments that made it painful to stand, and standing delayed their recoveries.
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.
Isn’t sitting less healthy than standing? Though, I agree, there should be stools. I see fatigued old timers at the registers who look like they could use a respit.
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".
Sitting also provides a very clear indicator to the customer that the cashier is NOT going to walk around the corner and bag their items for them.
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.
> Sitting also provides a very clear indicator to the customer that the cashier is NOT going to walk around the corner and bag their items for them.
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.
I had a job where i had to stand in one place all day - definitely hard the first couple of weeks - you adapt (+find comfy shoes), I would have never characterized it as unethical, and its probably a lot healthier...
Aldi's or another store is often very far away. I go to them because they are close and available. Most of us know they are more expensive. Time and travel need to be taken into account. Nearest grocery store is a minimum of 25 minutes one way. Family Dollar was 5 minutes away.
Exactly. I went into a Vons last night after going to Aldi and was just laughing at how expensive it’s gotten there. It’s not even inflation, it’s straight price gouging.
Dollar stores are good for those little on-off random kitchen chotchki, some tin foil, greeting cards, toilet drop ins, basically things that dont need to be 'buy for life' but there is no need to spend regular grocery store prices for that thing you will use rarely - and such.
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?
Aluminum foil at the dollar store is about half the price of the supermarket, but you get about a tenth as much.
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.
These places create food deserts, for the reason you mention. They are engineered to get poorer people to come there instead of a normal grocery store. The grocery store in your neighborhood struggles and closes, now you have to drive twice as far to get fresh produce, or go to Family Dollar and buy a week's worth of frozen Banquet meals.
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.
I would have thought a certain portion of the population becoming poor enough to want to shop at a cheaper store for lower quality products is what causes a store selling at higher quality products at higher prices to go out of business.
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.
Once the new store raises prices, why can another cheaper store not come in and do the cycle over again?
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.
It's hard to push into an existing market already controlled by a corporation worth billions. They have so much money in the bank that they can win any war of attrition. So nobody ever really tries.
> Once the new store raises prices, why can another cheaper store not come in and do the cycle over again?
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.
I live in the American West. Frequently these places open in very small towns, think sub-1000 people and 25 miles from anything else.
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.
One thing I noticed about Family Dollar anytime I went into one is their prices were not any better than the local grocery store. You walk into DollarTree and it feels like a dollar store, with Family Dollar there were tons of products I saw where I knew it was cheaper at the local grocery store, and not just cheaper where you would buy a bigger item for more but end up paying less for each unit, but 1-1 products that were more expensive than competitors.
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.
Family Dollar occupies a weird space. The successful stores are in locations where other retailers refuse to go. But they sell dollar store quality stuff at (sometimes higher than) Walmart prices.
"Amid higher costs throughout the economy, consumers have begun shifting to lower-margin goods compared with higher spending on discretionary items earlier in the post-pandemic period."
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.
Dollar stores generally have much higher margins than Walmart or Costco. They're more expensive per unit, but the upfront cash required by the customer is lower.
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.
Historically, dollar stores do better during bad times.
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.
Due to rock climbing, I spend a lot of time in poor rural areas (most recently, rural Tennessee).
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.
The love for Aldi must be very regional or personal. Because I walk into them and just see knock off snacks such as chips/poptarts, an aisle of rice and pasta, and an aisle of canned food items, and pretty much nothing else in them.
This reminds me of Aldi from about 25 years ago. Today, I buy most of my diet from Aldi: organic berries, grass fed beef, pasture raised chicken and eggs, etc. All are higher quality than other grocery stores, but much cheaper. I'm guessing this must be regional, which is sad.
The knock offs seem to be amazing quality in my experience. I go out of my way to buy Aldi brand goods as they are either rebadged mainstream brands or even better.
> I walk into them and just see knock off snacks such as chips/poptarts, an aisle of rice and pasta, and an aisle of canned food items, and pretty much nothing else in them
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.
Not me. Aldi is crap around me. I live in rural area, it's cheap generally way worse quality and we don't need more cheap crap grocery. I know hating on Aldi is unpopular on the internet, but that's been my experience.
Aldi has a number of high quality and healthy items. They have great prices for things like nuts, jerky, cheese, etc. Just skip the processed stuff like you should in any grocery store.
You should try Winco if you like Aldi. Has everything a grocery store does, but at Aldi prices. Doesn’t even take credit cards (in store), like Aldi used to prohibit.
Dollar tree had too many nearby family dollars. They tried to diversify into groceries vs. home goods but that only went so far.
I always figured the two were competitors based on how often both stores would be nearby..
Every Dollar Tree and Family Dollar that I've been in (and this applies to Dollar General as well, here in the southern US) has had 1, maybe 2, employees working and aisles filled with boxes waiting to be unloaded. A couple employees can't contain any sort of theft, much less help customers and unload all the stuff to put on shelves.
Little reason to be shocked on why their business model isn't working...
Family Dollar aggressively lowered the number of employees in their stores leading to disorganized and dirty store locations. It isn't surprising that they are now closing these locations.
I'm sympathetic to this view, but ultimately I think it's likely they are providing some benefit (even if their practices aren't 100% ethical) or else consumers wouldn't prefer them so much. I don't like to assume that a huge % of the population is too stupid to make basic choices.
It is necessary to Garry Tan's dream of disrupting the entire American society for the people to believe that everything about the economy is extremely bad.
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.