Dollar-stores overcharge customers while promising low prices

Candy bars and soda sure whatever. Look at essentials. The dollar store near me charges $1.99 for 8oz of Tide, the Albertsons a single block further charges $9.99 for 84oz, the dollar store is over double the cost. It's the same story with soap, cleaning products, etc. A tiny container for cheap feels like a deal if you can't do the math, but it's not. Feel free to "test it yourself."

I'm lucky in that I have a real grocery store nearby to compare to. If you live in a food desert where these big chains have driven out all competition you wouldn't have a choice.

It's not only the math but access to cash. Families living paycheck-to-paycheck struggle to make long-term investments. Paying 5x for larger quantities may pay off in the long-term, but if you're struggling to make ends meet and stretch dollars today, it might be overwhelming.

And what's the problem with that? You get a discount for buying larger amounts of basically everything.

Did you know you can save even more buying B2B/wholesale?

Sometimes it is more about the upfront cost and/or resulting storage space needed, than pure price efficiency.

Dollar stores are crowding out grocery stores in areas that only have the clientele to support one grocery store. They sell only higher margin, long shelf-life shit food, whereas real grocery stores have to carry produce which cuts into margins considerably cause it goes bad. So it's easier for them to stay open. And they create food deserts there. They are a fucking scourge for small towns.

>Sam Vimes ‘Boots’ Theory of Socio-Economic Unfairness

in action.

Source that they are replacing grocery stores? Dollar stores are closing and not expanding . 99 cents stores went bankrupt, rest have been closing hundreds of stores.

Also dollar stores carry produce just grocery at least largest ones do like dollar general. They are designed to compete against grocery stores and wallmart’s neighborhood markets.

There have been a few articles about this over the past couple of years, usually in reference to one study or another. Here's one that references a USDA study:

https://substack.perfectunion.us/p/dollar-stores-are-killing...

Sounds like the grocery stores were not serving their customer base well if they couldn’t compete with “overpriced” dollar stores.

Carrying cost of produce does not add up. If produce is going bad at that spoilage rate the store management fucked up and didn’t order the correct amount of product for the location. You can’t wish your way into a product mix.

Nothing was stopping grocery stores from identifying this need. Pretending your customer base is more affluent than it is sounds like a quick way to go out of business to me.

Then feel free to explain the studies and articles online describing how dollar stores are fucking rural grocery stores.

There's variations in dollar stores, and in packaging, and deals, and everything else.

Let's play with Tide, and with Kroger and Dollar General just because those are the two retailers that are near to me. We'll do biggest and smallest, and start with the smallest.

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The smallest bottle of original Tide that the Dollar General near me has is 34 ounces for $6.00: $0.1765 per ounce.

The Kroger near me has a similar, but lesser, bottle as their smallest offering: 32 ounce bottles for $5.99: $0.1872 per ounce.

Dollar General wins on smallest.

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The biggest bottle of Tide at Dollar General is 115 ounces; regularly, $16.95 ($0.147 per ounce). On sale for $15.95 ($0.139 per ounce). With a $4-off digital coupon, $11.95 ($0.104 per ounce).

At Kroger: 132 ounces for $19.99 ($0.151 per ounce). (With a $5-off-of-$25 digital coupon if I feel like giving Proctor & Gamble even more of my money in one transaction.)

Dollar General also wins at biggest. They win at regular price, and today they also win at sale price.

shrug

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Convenience also has a cost. For instance: I ran out of cat food on Christmas Day. Everything nearby was closed except for a Circle K, so I walked over there to see what they had. And they had cat food (of course they did). I bought the smallest container of Purina dry cat food I've ever seen for ~$9.

That was a lot of money for such a small amount of cat food, but I was happy to pay it. They had the right product in the right place at the right time. (And most importantly, the cat was happy.)

How about you cite something.

Explain why rural customers prefer the dollar store to the grocery store? Are they just stupid and don't know what's best for themselves?

Perhaps the rural grocers are not carrying the appropriate product mix for their current (new?) customer base, and are overvaluing customer service?

I don't like it - but I also spend time in rural communities and see why these places beat the local grocers. They offer better value for the dollar. Often they are indeed cheaper on a unit cost basis, much less overall per transaction.

It's sort of like folks screeching about "food deserts" in urban communities I've lived in, thus enacting laws forcing fresh produce be carried by the local convenience stores. That produce simply rotted on the shelves since - surprise! - the local business owners knew their customer base better than a bunch of do-gooder ivory tower academics did.

You can make some strong cases for Walmart putting Main Street rural America out of business using predatory pricing schemes and the like. It's a lot more difficult for dollar stores.

They do not offer better "value on the dollar" they offer units that individually cost less but over a year of buying what you need to survive you pay more. That's how items are generally priced; smaller packages, higher unit price (as in, price per ounce).

You shouldn't say "screeching" if you want to be taken seriously, it makes you sound shallow and dismissive, incapable of understanding how your narrow outlook is not applicable in some situations.

Please, take even the most basic efforts to understand what people are talking about here instead of forcing me to shove information down your throat like you haven't learned how to use an internet search yet. You don't need my help, and nothing I can say will be more convincing than your own personal research.

I don't see anything that says they are "fucking" them. I see plenty that they are out competing them. People get to choose to go to whatever grocery store they like.

I just replied to another comment. I lived in the most exclusive part of Atlanta for awhile where there was a Dollar Store right next to the Publix right next door to our $2500/month apartment.

https://www.yelp.com/search?find_desc=Dollar+Stores&find_loc...

Median home price - $700K

There are a lot of times you want smaller packages.

> They do not offer better "value on the dollar" they offer units that individually cost less but over a year of buying what you need to survive you pay more. That's how items are generally priced; smaller packages, higher unit price (as in, price per ounce).

Does the consumer not have all of the information available to them to make the comparison of the per unit cost between a dollar general and a local grocery?

Perhaps you you are motivated to believe that it's just "markets" at play. Monopolies and extortionate power don't exist, anyone who wins deserves to win, etc. Here is the top search result when I search for "dollar stores killing grocery stores" in Kagi.

> When dollar store chains open, it almost always cuts into the sales of local businesses. At first glance, it might seem like this is simply the nature of competition. But dollar stores use their hefty market muscle to make it virtually impossible for other businesses to successfully compete. With plenty of cash from shareholders and institutional investors, chain dollar stores have the resources to lose money indefinitely in a community until their competitors have folded.

> For many businesses, losing even a small percentage of sales can put the business at risk of failure. There are many types of businesses whose products overlap with chain dollar stores and that are therefore vulnerable, including hardware, small appliances, toys, reading materials, greeting cards, and health and beauty supplies. With dollar stores averaging around 10,000 square feet in size and sales of around $260/square foot, a typical Dollar General captures over $2 million in sales every year — and those sales are likely coming out of the cash registers of businesses already there.1

> This is an enormous problem for grocery stores in particular, which have razor-thin profit margins. Cutting into a grocery store’s sales even a small bit can endanger its survival. Food is what customers buy most often in dollar stores,2 making dollar stores a clear threat to grocery store survival or creation. And grocery stores’ profit margins are higher on items other than fresh produce — things like processed, prepackaged food and snacks — which is the bulk of the food that dollar stores sell. Peeling off just enough sales of packaged food can send a grocery store into the red.

> There are many examples of grocery stores that closed when a dollar store opened nearby...

https://ilsr.org/article/independent-business/17-problems/

This does not prove, at all, what you are claiming.

Is information availability the only constraint keeping people from making optimal choices?

K

So these big chains have drive out all competition. I assume you are referring to the big chain dollar stores. So how did they drive out all competition? Did they do it by charging more for items or by charging less for items? I think I am failing to see any sort of logic in the argument here.

Objectively yes that's the case. However, people are irrational and their irrationality is being exploited.