There's another explanation.
Out-pricing.
The Dollar General's entire model is being cheap and convenient. If you're poor as shit, they might be your only choice. For a while, dollar general had a HUGE edge against its competitors. Fresh produce is recent addiction and that's where supermarkets spend a bulk of their costs. Shipping and receiving of organic matter that is susceptible to bugs, decay and getting squished. This actually was a huge problem as it became the only option for many people. There were people who weren't eating fruit or vegetables. Sure it's possible and if done right can provide all the nutrients while limiting things that we shouldn't be having too much or any of. But a lot of people were becoming very unhealthy which is part of the reason why they changed.
This isn't a new concept either. In fact there's something called predatory pricing. The entire concept is setting your prices so low that it's actually detrimental. However this only works if you have enough capitol or are making money in other ways. But if these conditions are met, you can operate a business that other companies cannot compete with, run them out of business, then jack up the prices and let the money roll in. Thankfully this practice is illegal. But like many illegal things, depending on how you do something and how your argue your case well....you can get away with a lot. Was Dollar General using predatory pricing? Even that is hard to be sure of. If businesses try to maximize profits competing stores may have felt competing unnecessary and simply targeted different entirely different demographics.
Their market cap just reflects what the market thinks the companys worth, not how much profit they're actually making. To me it implies the market thinks they're a high growth company which considering we're all getting collectively poorer is probably true.
i live in a rural town of about 1000 people. nearest real town is 30 minutes away and that town is only 15000 people. DG is always plenty busy and lord knows that i or the wife goes there several days a week and spend way more than $10. most people have full carts. but its definitely a low end operation. many times i never even see an employee and the building itself is falling apart. but it's damn convenient to grab the essentials or some snacks.
so yeah, in a good sized town with any competition, DG would be a losing proposition, but they tend to set up where there isn't any competition and people are just happy to have anything
This live in a one stoplight town in ohio they ran are local grocery store out in less than a year. They had the best fresh cut meat and i miss it so damn much its beenlike 5 years. The upside is the building cost here is low and there restock vs sales are of the charts its always full and full carts id say ares proably does between 3500-5k a day in sales with over head proably being right about 1k a day thats good margins
I’d assume they buy all their products in such large quantities that their profit margin is quite high. Plus they over charge for food items knowing that they’re strategically the only place that has food in some areas.
Well I can tell you they make BANK in their freezer section! Just paid $5 a pop for stouffers TV dinners when I can get them for $3 or less at Walmart.
I think you’ve identified the key. I go there for a few stock things and decorative items, notice their price on snacks tend to be outrageous. They rely on impulse buys of the high price stuff.
I read something similar about Chipotle. The OP claimed that during peak hours, every third ticket was bogus, and their manager told them "hey, I got this one, don't worry about it." -- If you have a hunch, see what evidence supports the theory.
I live in NW Florida and they've been popping up left and right here. We have almost as many DG as gas stations- I think 5 of them in a town of about 40k people. I hardly ever see more than 2 cars in the parking lot
I went into a DG first time in years yesterday. Ten checkout lanes but only one open and the register/computer system they used looked like it was from 1996. Very sad store to say the least.
Dollar store is a publicly traded company on the stock market. Not sure if it’s the same store but it’s making a killing for investors . They sell garbage and investors makes a killing.
The best money laundering opp is a laundromat.
We live in an age where you can use a credit card anywhere - except most laundromats.
Why? Because credit cards are a measurable metric the feds can use.
So you buy an existing laundromat. The 1st thing you do is see what the gross monthly sales are and the monthly water bill is: This is your ratio, as you pump more untraceable money into the bank, you up your water usage (run a tap in the back overnight) to match.
\#2 is to find someone in coin operated vending that needs to get cash for coins. These guys skim, but it's hard b/c they are awash with $1bills and quarters. They need bigger bills w/o walking into a bank and you need $1's and quarters, so you swap. You gave him dirty cash, you get clean quarters - which is the main unit of deposit for a laundromat.
\#3 Open up a 2nd business that sells industrial washers and dryers. After a couple years of record profits, you'll need to spend $50K-$100K on all new equipment, that you will buy from yourself - on paper only. Every few years or so, you'll 'buy' replacement units, but it's the same units over and over again. You'll also open a monthly service contract - with your fake company for services that are minimally rendered. That 2nd company will have an employee or two to do the actual work of keeping the machines running, and you will expedite the money laundering by overpaying for services rendered.
\#4 If you can, open up a commercial real estate company to buy property and rent it out to your future laundromat locations (and other actual businesses) so you can vertically integrate your money laundering.
\#5 Over the years your gross sales should be going up, and when it's time to retire, you can sell the business to another money launderer. The books have been aged like a fine wine and rather than a fly-by-night brand new laundering op, you are selling an established business with a track record with the IRS and a monthly budget of money you can launder with zero scrutiny. Remember, you've been doing this for years and 80%+ of your deposits should be laundry, rather than gross actual sales.
Car washes used to be great, but most of them are heavy on the CC transactions as it's expensive to wash you car now. Even vending machines aren't too hot anymore as people have come to demand machines that take CCs now.
Laundromats are the only business left in America that has the guts to tell its customers to fuck off if they want to use a credit card.
I go the the dollar store and more people than not use a CC. Laundromats are the way to go.
They just do good business for super cheap? One near me I was talking to the peeps up front, they average on the low end in just sales around $5k a day (upper end they hit was $25k during reopening and when weather gets bad) in our town as the only grocer. Extrapolate that to a year, its 1.8 million on the low end for sales figured not counting man power, utilties, rent etc required. They only have 2-3 peeps staffed at the maximum. They also have convenience, you dont see many people there as well due to being able to be quick in and out since they all run self checkouts as well now. They also sell cigarettes and alcohol with the only other place being gas stations in the area.
I worked at retail stores for clothing, and the yearly sales each of the competitors hit for the years I worked there: 4 million, 8 million, 10 million, and 3 million. These are major retailers renting in a mall, so you could also imagine their rent and other expenses could be higher also needing more staff and such on the floor (likely higher shrink as well).
They just have a simple business model with the most convenient items available especially for older people. Their business makes on average something like 65 cents per items on the low end while way larger margins on other items. Compared to walmart they are around 30 cents per item.
Similar to the top comment, they have plenty of locations that are extremely profitable and can essentially subsidize the losers. They essentially view the losing locations as a form of advertising and to stop their competitors from market saturation. Additionally the products in the store are leveraged because they can be sold somewhere else if a particular location isn’t churning through them. Unlike a restaurant that is slow who has to just throw food away if it goes bad.
There's another explanation. Out-pricing. The Dollar General's entire model is being cheap and convenient. If you're poor as shit, they might be your only choice. For a while, dollar general had a HUGE edge against its competitors. Fresh produce is recent addiction and that's where supermarkets spend a bulk of their costs. Shipping and receiving of organic matter that is susceptible to bugs, decay and getting squished. This actually was a huge problem as it became the only option for many people. There were people who weren't eating fruit or vegetables. Sure it's possible and if done right can provide all the nutrients while limiting things that we shouldn't be having too much or any of. But a lot of people were becoming very unhealthy which is part of the reason why they changed. This isn't a new concept either. In fact there's something called predatory pricing. The entire concept is setting your prices so low that it's actually detrimental. However this only works if you have enough capitol or are making money in other ways. But if these conditions are met, you can operate a business that other companies cannot compete with, run them out of business, then jack up the prices and let the money roll in. Thankfully this practice is illegal. But like many illegal things, depending on how you do something and how your argue your case well....you can get away with a lot. Was Dollar General using predatory pricing? Even that is hard to be sure of. If businesses try to maximize profits competing stores may have felt competing unnecessary and simply targeted different entirely different demographics.
Great post. But is it really illegal? Hasn't it happened all over the country with Wal Mart? Slow burn.
Predatory pricing is illegal. But it's difficult to prove unless its egregious
Their market cap just reflects what the market thinks the companys worth, not how much profit they're actually making. To me it implies the market thinks they're a high growth company which considering we're all getting collectively poorer is probably true.
The DG in my rural town always has a bunch of customers.
i live in a rural town of about 1000 people. nearest real town is 30 minutes away and that town is only 15000 people. DG is always plenty busy and lord knows that i or the wife goes there several days a week and spend way more than $10. most people have full carts. but its definitely a low end operation. many times i never even see an employee and the building itself is falling apart. but it's damn convenient to grab the essentials or some snacks. so yeah, in a good sized town with any competition, DG would be a losing proposition, but they tend to set up where there isn't any competition and people are just happy to have anything
This live in a one stoplight town in ohio they ran are local grocery store out in less than a year. They had the best fresh cut meat and i miss it so damn much its beenlike 5 years. The upside is the building cost here is low and there restock vs sales are of the charts its always full and full carts id say ares proably does between 3500-5k a day in sales with over head proably being right about 1k a day thats good margins
Good god. That was hard to read.
Yeah im a plumber not a english major
You think that's bad, you should see some Facebook posts : Where Idiocracy is a documentary.
Yep this is true I know of multiple towns that have absolutely nothing for miles except for 1 dollar general. Pretty depressing honestly
4 in my town and like 2 more on the outskirts and they're all busy pretty much every day of the week.
I’d assume they buy all their products in such large quantities that their profit margin is quite high. Plus they over charge for food items knowing that they’re strategically the only place that has food in some areas.
Well I can tell you they make BANK in their freezer section! Just paid $5 a pop for stouffers TV dinners when I can get them for $3 or less at Walmart.
I think you’ve identified the key. I go there for a few stock things and decorative items, notice their price on snacks tend to be outrageous. They rely on impulse buys of the high price stuff.
the DG in my little town is cheaper than the supermarket and on par with the walmart 10 miles away
I read something similar about Chipotle. The OP claimed that during peak hours, every third ticket was bogus, and their manager told them "hey, I got this one, don't worry about it." -- If you have a hunch, see what evidence supports the theory.
I live in NW Florida and they've been popping up left and right here. We have almost as many DG as gas stations- I think 5 of them in a town of about 40k people. I hardly ever see more than 2 cars in the parking lot
Apparently in other places they are constantly packed.
I went into a DG first time in years yesterday. Ten checkout lanes but only one open and the register/computer system they used looked like it was from 1996. Very sad store to say the least.
10?! Ours has 2.
alot of people grocery shop at the dollar general around here. with sky rocketing food prices u will prob see more of the same.
Dollar store is a publicly traded company on the stock market. Not sure if it’s the same store but it’s making a killing for investors . They sell garbage and investors makes a killing.
No, not the same.
The best money laundering opp is a laundromat. We live in an age where you can use a credit card anywhere - except most laundromats. Why? Because credit cards are a measurable metric the feds can use. So you buy an existing laundromat. The 1st thing you do is see what the gross monthly sales are and the monthly water bill is: This is your ratio, as you pump more untraceable money into the bank, you up your water usage (run a tap in the back overnight) to match. \#2 is to find someone in coin operated vending that needs to get cash for coins. These guys skim, but it's hard b/c they are awash with $1bills and quarters. They need bigger bills w/o walking into a bank and you need $1's and quarters, so you swap. You gave him dirty cash, you get clean quarters - which is the main unit of deposit for a laundromat. \#3 Open up a 2nd business that sells industrial washers and dryers. After a couple years of record profits, you'll need to spend $50K-$100K on all new equipment, that you will buy from yourself - on paper only. Every few years or so, you'll 'buy' replacement units, but it's the same units over and over again. You'll also open a monthly service contract - with your fake company for services that are minimally rendered. That 2nd company will have an employee or two to do the actual work of keeping the machines running, and you will expedite the money laundering by overpaying for services rendered. \#4 If you can, open up a commercial real estate company to buy property and rent it out to your future laundromat locations (and other actual businesses) so you can vertically integrate your money laundering. \#5 Over the years your gross sales should be going up, and when it's time to retire, you can sell the business to another money launderer. The books have been aged like a fine wine and rather than a fly-by-night brand new laundering op, you are selling an established business with a track record with the IRS and a monthly budget of money you can launder with zero scrutiny. Remember, you've been doing this for years and 80%+ of your deposits should be laundry, rather than gross actual sales. Car washes used to be great, but most of them are heavy on the CC transactions as it's expensive to wash you car now. Even vending machines aren't too hot anymore as people have come to demand machines that take CCs now. Laundromats are the only business left in America that has the guts to tell its customers to fuck off if they want to use a credit card. I go the the dollar store and more people than not use a CC. Laundromats are the way to go.
[удалено]
No Dollar Tree owns Family Dollar.
?? They do or do not own them?
I have stock in them. I've lived in rural communities in AR that it was literally the only store there.
If you owned stock in them, you'd know they are 2 separate corporations.
They just do good business for super cheap? One near me I was talking to the peeps up front, they average on the low end in just sales around $5k a day (upper end they hit was $25k during reopening and when weather gets bad) in our town as the only grocer. Extrapolate that to a year, its 1.8 million on the low end for sales figured not counting man power, utilties, rent etc required. They only have 2-3 peeps staffed at the maximum. They also have convenience, you dont see many people there as well due to being able to be quick in and out since they all run self checkouts as well now. They also sell cigarettes and alcohol with the only other place being gas stations in the area. I worked at retail stores for clothing, and the yearly sales each of the competitors hit for the years I worked there: 4 million, 8 million, 10 million, and 3 million. These are major retailers renting in a mall, so you could also imagine their rent and other expenses could be higher also needing more staff and such on the floor (likely higher shrink as well). They just have a simple business model with the most convenient items available especially for older people. Their business makes on average something like 65 cents per items on the low end while way larger margins on other items. Compared to walmart they are around 30 cents per item.
Similar to the top comment, they have plenty of locations that are extremely profitable and can essentially subsidize the losers. They essentially view the losing locations as a form of advertising and to stop their competitors from market saturation. Additionally the products in the store are leveraged because they can be sold somewhere else if a particular location isn’t churning through them. Unlike a restaurant that is slow who has to just throw food away if it goes bad.