A Tale Of Two Dollar Stores

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You would go into a store, and there would be a bunch of stuff in there that would only cost a dollar and during the great recession this meant a lot to people customers poured into dollar stores in two thousand nine Dollar General already had nearly six thousand stores today. It has about fifteen thousand stores Family Dollar was a bit smaller had roughly six thousand stores in two thousand nine now it has almost nine thousand and both stores were basically going after the same customers that WalMart targets. But these stores could go where WalMart's couldn't like in cities, for instance, New York, there is a Dollar General and Family Dollar both pretty close to where I live in Brooklyn. They also went really hard into small rural areas where the population was not big enough to support a whole WalMart superstore lake that three hours outside of Saint Louis drive down. There we go through this little town, and it's got like twelve hundred people to Family Dollar Dollar General and a little low. Grocery store. I mean, the nearest WalMart's like thirty five to forty minutes away. This is Brian Yarbrough. He's a consumer analyst at Edward Jones. When the economy slows down, they actually perform a little better because you'll see people trade down. So people will go into some of the higher price grocery stores and places, and they'll trade down into the dollar store environment. So in the teeth of the recession Family Dollar Dollar General. We're just having their moment the bad times for the economy or the good times for dollar stores. But when the recession ended, and the recovery started these stores made very different bets on how to survive during the recovery, and you can see the difference in these shopping bags that I brought back from both stores. So I up Dollar General Dollar General decided we are gonna go hard after the mini WalMart thing. They basically became a grocery store, and this makes sense, right? Because in good times and bad people always need the basics, groceries pet food detergent and dollar generals. Like, we are going to be the place where people can get cheap basics. So you can see. In here basics. Yeah. Got a got a carton of milk. Sure. Dollar General basically went hard after the grocery segment of the market. So buying Yarbrough says mall. It's convenient way home though. I need some milk or anything bread. You can be in and out in you know, two or three minutes versus, you know, go to a WalMart supercenter, and it could be a fifteen or twenty minute ordeal. That's journey. Exactly. So I went to the Dollar General store near me, and I could see all this right away. It was really nice. It was super clean and well organized, right? When I walked in. There was this big fancy. Starbucks display. They're selling some new kind of canned Espresso got you. Again. You know me. So well, that's exciting. And I got you a red bull. Just in case in case. And they had all the name brands like everything you might have on your grocery list. Chips. Ahoy the peeps. Of course. It'd be easy heaps. It's like a whole variety of things. Some of this stuff is like a treat at love it. All right. Exactly. So I spent about thirty dollars on all this stuff. You know? So the prices are good, but not super super-low, but it was very easy to navigate. It was really pleasant shopping experience that shiny yellow cards everything was organized, and then I wanna few blocks away to Family Dollar, so Family Dollar two very different tack. They went really hard on the dollar part. So after all there's a promise in the name of a dollar store. Right. And they kept this promise. But in order to keep things price low. You can't really have regular groceries. Right. You can't live like eight kinds of chips ahoy, and you know, Starbucks displays and things like that diversity, right? Like if you're enforcing the price. You're not going to be able to get everything you want for that same price and in order to keep. Prices that that low you end up having to kind of get a bunch of weird stuff. Right. Like, a hodgepodge lot of food and weird small packages very excited about this. There's this Honey nut Cheerios. That's like I like cutting Cheerios, but it's like yours. To servings or something it's like a packet bills. Have a lot of off brand stuff. Like, there's this energy drink red bull. I've got here a drink called rip it energy with a picture of a soldier holding a flag a gun in the colors of the American flag. This is like super patriotic energy, Drake. And you know, it takes the edge off of a heart afternoon card marshmallow offering marshmallows. Yeah. You also end up with this kind of grab bag of stuff that's made in India and China kind of whatever fell off the truck that week a little bit more candy holiday decorations seasonal type items galaxy allow that comes from China a lot of its discretionary nature driving people with these great deals. I mean Family Dollar brings in whatever. It can Mark down. The selection is more random. So like here is an Easter banner for you. I got to a paper crown check it out. This is my favorite purchase a skittles flavored candle handle, I know eight for my gift from me to you for your house when a glow sword. Okay, close. Yeah. I know. Yeah. We're gonna have to wear those around the office knows glasses a package of six gradu- marks knows last night with the mustache and everything six of them for a dollar. So in order to keep their prices, low Family Dollar did not invest in fancy stores the way the Dollar General did they kept overhead low, and you know, the stores as a result are a little hard to navigate I spent like three times longer in the Family Dollar store into the lots of poking around. And and honestly the experience of being in the store was a little bit unpleasant. Like, right when you walk in. This automated voice told you you were being monitored. I mean, all the stuff was just a dollar. So the deals were actually really amazing. I kinda couldn't believe all the stuff I could get for dollar so Cardiff who dollar stores to business models one chain bet on the dollar one chain bet against the dollar, which one do you think is still thriving? I'm gonna guess Dollar General. You are right. Okay. Dollar General has been killing it brought in customers with higher. Income during the downturn. And some of those customers are still customers today. They didn't leave them Dollar General has grown every single quarter. For nearly a decade. Brian Yarbrough said going upscale ish kind of paid off people like shopping there, and they like the deals so even when times got better and people could maybe afford to shop in a more expensive store. They didn't they kept shopping Dollar General because they liked it. And also because Dollar General is a big chain. They're able to get lower prices for a lot of the name brand stuff. They carry an offer better deals than like local grocery stores in rural areas or corner stores in cities Family Dollar on the other hand did not fare. So well as the economy improved people are willing to spend a little bit more on things like holiday decorations, and candy, and cutlery, and pens and skittles candles, and they wanted a more pleasant shopping experience and Family Dollar kind of went sideways again, I think when dollars was investing opening new stores updating and remodeling stores and family. Which is kind of plotting the loan. You know, I think Dollar General took a lot of market share and took a lot of customers. Now, I think, you know, Family Dollar struggling to gain those back Stanley dollar was bought out years back, and it just announced that it is going to close nearly four hundred locations totally rethink its business model, it'll probably also start to leave the dollar part behind things are probably gonna get more expensive there, which makes me a little bit sad because you know, where else are you gonna find like six Groucho Marx glasses for a dollar on the other hand if the economy goes into recession again, then maybe their fortunes will switch yet. They could be singing a happy. Tune with one dog. Purple plastic recorder that

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