Even if they accurately charged shelf prices, these places are still a ripoff targeting the vulnerable. The list price is low but the per-unit price is astronomical compared to grocery store prices.
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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.
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.
> 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...