We're going to see a lot more dollar stores soon. That's what the company that owns Dollar Tree and Dollar General told the Wall Street Journal. But here's the strange part. These stores are making a lot less money than they used to.
The best dollar store customers, low-income shoppers making less than 30 grand a year, are spending a lot less due to inflation. At the same time, mega chains like Walmart and Target are cutting prices to attract more of these same consumers. And that's not counting the competition from Amazon, whose delivery is finally improving in rural areas where dollar stores dominate.
Meanwhile, more affluent shoppers, especially those making over $100,000, are avoiding dollar stores as much as possible. Oh, yeah. They tell the Journal it's harder than ever to hire and retain employees. And retail theft is through the roof.
Their answer to all this? Open more stores. Around 1,300 more of them. Sounds counterintuitive, doesn't it? But there's a method to this madness. They're betting on a recession. Historically, dollar stores thrive when the economy tanks because there are always winners, no matter the circumstances.
I think there are already too many of these stores. They're on both sides of the main thoroughfares around me, and I can't go more than five minutes without seeing one. The quality of their products is awful. And this all reminds me of something an old friend once argued. He said we should ban these stores from the city limits. I still think he's crazy, but a limit doesn't sound like such a bad idea.
So what gives? Are dollar stores expanding their way to success or digging a deeper hole? What do you think of them? Are you a dollar store devotee or do you avoid them like last week's leftovers?
Let me know in the comments and support my work at jamesbrowntv.substack.com. On that note, I'm James Brown. And as always, be well.
Dollar Store Dilemma