Re:Dollar General Hits a Gold Mine in Rural America
by ajmurmann on Wednesday October 18, 2017 @02:05PM
(#15501387)
To your third point: I think there issue here is that wealthy people are also more likely to buy different products. I got example only buy Jersey milk and pasteur raised eggs. Because of that alone I have to stop either at Whole Foods or a similar local chain. I but most other staples at Costco. Stopping at one more store to save a small amount of money most of the time isn't worth the hassle.
Re:Dollar General Hits a Gold Mine in Rural America
by HeyLaughingBoy on Wednesday October 18, 2017 @01:48PM
(#15501255)
3) You don't have to be poor to want to buy things at low prices
A ridiculous number of "analysts" either ignore, or don't realize this. I have a 6-figure income, yet my wife will buy the cheapest crap she can find that will do what we need. Boots? Buy expensive ones that will last and not leak. Hallowe'en decorations? Head for the dollar store.
>“It reminds me of a craps table,” Brown, the commercial real estate analyst, says. “Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America. It’s based on the concept that the jobs went away, and the jobs are never coming back, and that things aren’t going to get better in any of these places.”
To it sounds like he doesn't understand that:
1) Being able to exist in places other stores cannot lets DG capture a ton of sales that would otherwise be rolled into a planned trip somewhere else.
If you need more toothpaste and your options are Walmart that's 1hr away or DG that's 30min away where are you going?
If DG or some other store can pay the bills the month that nobody happens to run out of toothpaste ahead of schedule they are around to turn a profit on a good month.
2)Rural areas are sparsely populated by definition. They do not have enough customers to support many stores that sell the same thing.
In suburban and urban areas some stores turn a profit with volume by attracting poor people with razor margins and other stores run thicker margins (or have higher costs) which make the poor people shop elsewhere but they make it back because the people who don't want to shop among poor people shop there instead. There just aren't enough customers to sustain this in a lot of rural areas.
3) You don't have to be poor to want to buy things at low prices.