Dollar General Hits a Gold Mine in Rural America

Places like this have always been big in rural areas. I&#x27;m from Maine, and there&#x27;s two local chain stores, Reny&#x27;s and Marden&#x27;s that have been around for a long time, and have always been stocked with weird brands, consignment stuff, closeout items, and such, and the whole appeal is that it&#x27;s cheap(er) stuff than you&#x27;d usually find, and you never quite know what you might find in stock.<p>Plus, incredibly terrible local TV commercials<p>Renys <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=OMNCjsz9ob8" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=OMNCjsz9ob8</a><p>Marden&#x27;s <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=AZ_iM2jrLGU" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=AZ_iM2jrLGU</a>

&gt; “You rascals!” Tharp remembers telling the executive who called to deliver the news. “You come to these small towns, and you build these stores, and you cause all the mom and pops to close down, and now you’re the only ones left standing, and you want to go home? Why would you do that to our community?”<p>&quot;Rascals.&quot; I&#x27;m not sure I&#x27;d be so polite, if I were mayor. The cycle that Bob describes is practically rote tradition by this point, but that doesn&#x27;t make it any less frustrating or audaciously malicious.

Two Dollar General stores separated by a mile popped up in my hometown in northern California, a place that can barely support two of any stores even grocery stores. Dollar General stores are expensive and nearly always empty. When I lived in the south eight years ago, Dollar General stores were expensive and empty too. I would not be surprised at some point if the economics of their expansion didn&#x27;t make sense.<p>As someone else mentioned, Dollar Tree is different. There is a Dollar Tree that is always packed next to an empty Dollar General in my hometown. Dollar Tree is a deep discount store. Dollar General is a convenience store without gas.

Dollar General has amazing logistics end-to-end, possibly better than Walmart. Clearly the difference is enough to make them profitable, if barely, in circumstances Walmart isn&#x27;t.<p>What&#x27;s new information for me is that DG can make things work in tiny towns that only support a single store. A lot of what I&#x27;ve read about their strengths in the past had to do with how well they manage multiple stores in one city.

As an aside, it both saddens and surprises me that we don&#x27;t hesitate twice when buying the cheap stuff (made abroad, of course) but also complain that all the jobs have left.<p>It&#x27;s certainly not a small town, blue-collar occupation issue but it does affect them disproportionately.<p>This recent NYTimes piece was an eye-opening read for me in that regard. [<a href="https:&#x2F;&#x2F;www.nytimes.com&#x2F;2017&#x2F;10&#x2F;14&#x2F;us&#x2F;union-jobs-mexico-rexnord.html?_r=1](https:&#x2F;&#x2F;www.nytimes.com&#x2F;2017&#x2F;10&#x2F;14&#x2F;us&#x2F;union-jobs-mexico-rexnord.html?_r=1)" rel="nofollow">https:&#x2F;&#x2F;www.nytimes.com&#x2F;2017&#x2F;10&#x2F;14&#x2F;us&#x2F;union-jobs-mexico-rexn...</a>. Not that I didn&#x27;t know this but to have it be made so vivid, it was hard to digest stuff.<p>I&#x27;m not even sure if there&#x27;s a good solution in sight. Basic income and all that is fine but people still need to be and feel productive and busy for us to stay a sane society.

<i>“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.”</i><p>That&#x27;s a pretty strong quote to bury halfway through the article.

There&#x27;s just something off about products from DG, especially the ones in specially marked DG packaging.<p>It&#x27;s the same products I usually buy, but at a subtly lower quality. I always know, by taste, when cookies come from a dollar store.<p>Duracell batteries just don&#x27;t seem to last as long.<p>Things like that.

They are rated 2.8, which is below the 3.2 rating that Walmart has on Glassdoor. Low pay, long hours, everyone is a &#x27;manager&#x27;...<p>I go there often as they have much lower prices on snacks&#x2F;drinks than convenience stores or Walgreens, and there&#x27;s one very close to my apartment if I need anything else from cleaning supplies to a can of chicken broth and don&#x27;t feel like making a trip to Walmart or Kroger.<p>And there are stores in each of the small towns up north I vacation at. They&#x27;re often the only store in town and there&#x27;s always a line on the weekends, people buying snacks and coolers and beach supplies.<p>The stores are bare minimum, no flooring other than concrete, merchandise all over the place, and usually 1 employee working.

I had a friend who sold software to run generic dollar stores. It was fully integrated POS -&gt; inventory, etc. He was making a ton of money traveling to tiny towns across America.

There is a Japanese competitor growing in the US recently. I have seen a few of them in San Francisco. Interesting to see their take on this concept vs American version. <a href="http:&#x2F;&#x2F;www.daisojapan.com&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.daisojapan.com&#x2F;</a>

A Dollar General store opened this spring in my small rural town. Before it opened there was only a Ray&#x27;s grocery store with a huge markup. I, and everybody with time and a car, used to drive 45+ minutes into town. I&#x27;m very price conscious and I&#x27;ve seen some items at DG cheaper than at Winco. Most items are about the same or only slightly higher. So now I buy perishable items (bread, ice cream, etc) at Dollar General and don&#x27;t need to drive into town as often.

A few thoughts:<p>* I&#x27;m surprised you only have to be 10 miles from a Supermarket to be considered a food desert. I would get this in a populated area, but in a rural town of barely over 1000, it seems expected that you might drive a ways. Hell, in many rural areas you might drive a mile or two to even be on a main road! They do specifically mention &quot;a rural area 10 miles..&quot; which probably means in a city the distance to qualify as a food desert would be much smaller, which makes sense.<p>* I wonder why they didn&#x27;t bother verifying pay at the chicken plant. If the workers say they make $8.50 an hour and the employer says the minimum pay is $11.50, it seems like a quick glance at a paystub is all it would take to validate the story rather than just throw up your arms and say &quot;well, some people disagree&quot;. Though I imagine the most likely cause is the latinos are undocumented and hence being paid under the table.<p>* Sounds like the 20-30mi roundtrip drive to Bentonville is costly in terms of gas money (not to mention time!), but I was stunned that the employee talked about how many of the customers were in the Dollar General store 3-4 times a day (!!)

convenience + not outrageous prices (more than Walmart ... but way closer and faster) + and [generally] friendly staff == solid business results

Looking at the numbers:<p>A typical Dollar General costs $250,000 to open.<p>The average sales per square foot is $229.<p>The store in the article is 17,000 sq ft.<p>Dollar Generals overall profit margins are 30%.<p>That store should have earned ~$3,900,000 in sales its first year, which is roughly $1.2 million in profits.<p>No wonder they are expanding so fast, the profits cover the initial investment costs in as little as 3 months. That&#x27;s incredible.

when I worked for one ; top three drugstore chain, I shook my head during a loss prevention meeting when one of our managers said over 90% of the stores profits came from the cosmetics isle. It was after the 08&#x27; crash and there was a concern over theft !

Interesting article. Left my house in the middle of reading the article to go to Dollar General and get cookies. That Dollar General has been there my whole life, but only recently did we start going there regularly. It was mostly after they started selling some food, and esp. after they started selling milk and eggs at a loss. I was there 4 times in one day this weekend. We would never have done that a few years ago. They also went from one grimy store to three stores in the last five years in our small Midwestern town.

There&#x27;s a Dollar Tree (competitor to Dollar General with a similar business model) in South San Francisco that I shop at sometimes for cleaning supplies&#x2F;paper goods&#x2F;party items. I wouldn&#x27;t trust most of their food offerings, but for the sort of thing I buy there they generally charge 30-50% of what a traditional grocery store in the area does. I have no idea how they can make this business model work with the cost of rent in the area, but I love it.

&quot;Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America&quot;<p>I would phrase that differently.<p>&quot;Essentially what the dollar stores are betting on in a large way is that we are going to see an increase in the underclass in America&quot;.<p>We&#x27;ve always had an underclass, it&#x27;s just increasing at an unprecedented rate.

&quot;If we don&#x27;t have it, you don&#x27;t need it.&quot; manager or w. Paris ME DG told me.<p>DG was closest anything 17 minutes from vacation home

I moved to my parent&#x27;s lakehouse in rural Kentucky this Fall to study and build a software project.<p>One of the first things I noticed is exclaimed succinctly in this headline, and they can milk this cow dry for a long time.<p>I submit regular complaints on their websites, to help the sweet ladies who keep my local one afloat. The management would not let them use AC until mid-July.

Dollar Stores are a terrible deal. The products not only tend to be inferior but they skimp on the quantity, so you end up paying a much higher per-unit price than had you shopped at Walmart or anywhere else.

Living in the rural mid-Atlantic U.S., I&#x27;ve definitely seen a lot of Dollar Generals popping up all over the place. Never knew they carried groceries like meat and produce, though.

This is cool I was just wondering why they have opened 3 different Dollar General stores in my area! I can drive to all 3 in less than 10 minutes it&#x27;s insane.

&quot;Where even Wal-Mart failed&quot;<p>I wonder how the new info that Wal-Mart is now outpricing (cheaper) that dg will affect this?

I&#x27;ve also seen dollar stores (not Dollar General, but others) in underserved areas of major cities.

Referral link for paywall: <a href="https:&#x2F;&#x2F;www.google.com&#x2F;url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwic64KH0PrWAhVB0oMKHUkbBmgQFggoMAA&amp;url=https%3A%2F%2Fwww.bloomberg.com%2Fnews%2Ffeatures%2F2017-10-11%2Fdollar-general-hits-a-gold-mine-in-rural-america&amp;usg=AOvVaw3wyjgi-k7q_xhUqXnVi2xz" rel="nofollow">https:&#x2F;&#x2F;www.google.com&#x2F;url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;c...</a>

Who ever made that Who Shops Where in Arkansas graph needs to be castrated.