For this reason (cashflow) they are seen as a good option for poor people, where in reality everyone would be better served by Costco if they had the cash and storage room to buy in bulk, and a car.
I’m wondering if Dollar General is what’s really hurting them. I hear people talk about Dollar General all the time, but almost never Family Dollar. DG seems to be the Walmart of the dollar store game.
Dollar General has a few things going for them in these areas:
1. They seem to have very low staffing costs. Most stores seem to have at most 2 workers on staff at a given time (obviously this is higher in busier areas).
2. They seem to have no compunction about putting stores in pretty remote locations (example: [1]). This is probably enabled by having low staffing costs--a store doesn't have to make huge revenue if its costs are low.
3. They seem to have a very standard formula for new stores, which allows them to build them quickly. I've seen a flat lot with trees starting to grow in it, go to an open Dollar General in approximately 9 days. I can't imagine what sort of feats of organizational engineering allows that, but it has to be an advantage because it allows them to pivot into an area quickly. And I would imagine the non-descript buildings are fairly easy to sell, allowing them to pivot out of areas quickly as well.
4. Their competition in remote areas is usually gas stations. While DG isn't cheap compared to Walmart or Aldi, they're often about 2/3 the price of gas stations for a lot of items.
If Family Dollar is not lower margin I'm not sure what is. My guess is they have mostly lost out to internet sellers and Walmart.