WEBVTT - How do Dollar Stores stay in Business? 0:00:03.279 --> 0:00:06.240 Welcome to Part Time Genius, a production of I Heart Radio. 0:00:11.640 --> 0:00:14.239 I Guess what Will? What's that Mango? So, if you're 0:00:14.280 --> 0:00:16.360 anything like me, you've probably noticed that there are a 0:00:16.440 --> 0:00:19.480 lot of different dollar store chains out there, Like pretty 0:00:19.520 --> 0:00:21.960 much everywhere you look, there's like a Dollar Tree or 0:00:22.000 --> 0:00:25.880 a Dollar General or a Family Dollar. There's a five below. 0:00:26.000 --> 0:00:28.480 I looked this up. There's a ninety nine cents only. 0:00:28.560 --> 0:00:31.200 I mean, it's just dollar stores all the way down. 0:00:31.320 --> 0:00:33.600 I feel like, you know, I feel like maybe I 0:00:33.680 --> 0:00:36.360 haven't cataloged them quite as extensively as you have. I 0:00:36.360 --> 0:00:38.400 had forgotten this was one of your hobbies. But but 0:00:38.560 --> 0:00:41.120 I will acknowledge there are a lot of them. So 0:00:41.320 --> 0:00:43.000 I looked into it this week, and it turns out 0:00:43.040 --> 0:00:45.800 that even though the stores seem the same, each brand 0:00:45.840 --> 0:00:49.800 actually targets a completely different market. So what does that 0:00:49.840 --> 0:00:53.199 mean exactly? Dollar General A Friendly targets older customers in 0:00:53.240 --> 0:00:57.600 more rural areas, so they've intentionally built their stores in 0:00:57.720 --> 0:01:00.680 small towns with fewer than twenty people. And then on 0:01:00.720 --> 0:01:03.279 the opposite side, you've got things like five Below and 0:01:03.400 --> 0:01:06.600 it's target demographics teens and young adults, so you actually 0:01:06.640 --> 0:01:09.880 find those in suburban shopping malls. Actually, when you mentioned 0:01:09.880 --> 0:01:11.920 that the first time, I was I didn't remember that, 0:01:11.959 --> 0:01:14.360 But now that you say that, I can picture these 0:01:14.400 --> 0:01:17.440 being in shopping malls. So what about Dollar Tree and 0:01:17.440 --> 0:01:19.520 what was that you said? Family Dollar? Like, I know 0:01:19.560 --> 0:01:21.880 I've seen both of those around. What who do they target? 0:01:22.080 --> 0:01:25.040 So what's weird is they're actually owned by the same company. 0:01:25.120 --> 0:01:27.960 Dollar Tree bought Family Dollar back in two thousand fifteen, 0:01:28.040 --> 0:01:33.199 for I believe it's a nine billion individual dollars and 0:01:33.440 --> 0:01:35.800 a huge reason for that, biot was because Dollar Tree 0:01:36.080 --> 0:01:39.759 caters to middle income shoppers and Family Dollar goes after 0:01:39.760 --> 0:01:42.920 the lower income ones, and the company wanted both markets. Yeah, 0:01:42.920 --> 0:01:44.800 it's funny, but I I feel like we do sort 0:01:44.840 --> 0:01:47.920 of treat these dollar chains interchangeably, like they're just kind 0:01:47.920 --> 0:01:50.360 of there. You You really would never guess that behind 0:01:50.400 --> 0:01:53.160 the scenes they were playing this pretty intricate game with 0:01:53.160 --> 0:01:55.120 each other, like carving up the market in the way 0:01:55.160 --> 0:01:57.600 that they are. Yeah, there's actually way more going on 0:01:57.680 --> 0:01:59.920 with dollar stores than people might guess from you know, 0:02:00.120 --> 0:02:03.360 how they turn to profit, whether one dollar steaks are 0:02:03.400 --> 0:02:05.640 really a good deal after all? So why don't we 0:02:05.680 --> 0:02:29.120 dig in? Y he Their podcast listeners welcome to part 0:02:29.160 --> 0:02:31.799 time genius. I'm Will Pearson and it's always I'm joined 0:02:31.840 --> 0:02:34.079 by my good friend Manes Ticketer and on the other 0:02:34.080 --> 0:02:37.240 side of that soundproof glass testing out his latest fine 0:02:37.320 --> 0:02:41.320 from the dollar store. That's our friend and producer Lowell Berlante. 0:02:41.840 --> 0:02:43.919 And what a fine this was. I mean, hold the 0:02:43.960 --> 0:02:45.560 box up again, low I need to see it just 0:02:45.600 --> 0:02:49.160 a little bit higher. So it's basically a Nettie pot, 0:02:49.200 --> 0:02:52.200 except it's called a Yetti pot for some reason, and 0:02:52.320 --> 0:02:54.880 on the front called it a little bit closer. The 0:02:54.919 --> 0:02:57.240 front of the box shows a couple of what I 0:02:57.320 --> 0:03:01.400 presume are meant to be yettis wearing a teapot up 0:03:01.440 --> 0:03:06.040 its nose. It's it's kind of a weird, but I 0:03:06.040 --> 0:03:10.519 would definitely pay two dollars for that twice twice as much. 0:03:10.919 --> 0:03:12.640 So I definitely want to talk about some of the 0:03:12.680 --> 0:03:15.640 other strange stuff that turns up, you know, at dollar stores. 0:03:15.680 --> 0:03:17.880 But why don't we start by getting a sense for 0:03:17.960 --> 0:03:20.400 just how big a success story dollar stores really are 0:03:20.880 --> 0:03:23.000 so they don't get a ton of respect. But in 0:03:23.080 --> 0:03:26.320 doing the research, Gate basically pointed out that they're kind 0:03:26.360 --> 0:03:29.040 of the unsung kings of retail. Yeah, I don't know, 0:03:29.040 --> 0:03:30.600 if this is true, but it feels like there are 0:03:30.639 --> 0:03:33.280 more dollar stores now than there were when when we 0:03:33.280 --> 0:03:36.680 were growing up. It's definitely true. So dollar stores have 0:03:36.720 --> 0:03:39.400 been a fixture of American strip malls since the nineteen fifties, 0:03:39.760 --> 0:03:42.160 but one of their biggest booms came during the Great 0:03:42.160 --> 0:03:45.320 Recession of two thousand seven, and as the economy declined, 0:03:45.600 --> 0:03:49.200 dollar stores sales went way way up, and it resulted 0:03:49.240 --> 0:03:51.240 in this swell of like news stores opening up all 0:03:51.240 --> 0:03:54.560 over the country. But the really surprising part is that 0:03:54.640 --> 0:03:57.960 this popularity hasn't worn off like dollar stores just keep 0:03:58.080 --> 0:04:00.600 on thriving. And in fact, between two thousand ten and 0:04:00.600 --> 0:04:04.800 two thousand thirteen, the Family Dollar chain opened fifteen hundred 0:04:04.840 --> 0:04:07.520 news stores, which is more than one a day for 0:04:07.680 --> 0:04:10.160 four years in a row. Holy cow. And so I 0:04:10.240 --> 0:04:12.560 was guessing insane. Yeah, I'm guessing it wasn't just a 0:04:12.640 --> 0:04:15.600 Family Dollar doing this too. Yeah. So the other chains 0:04:15.640 --> 0:04:18.640 like Dollar Tree and Dollar General they were expanding to. 0:04:19.240 --> 0:04:21.719 Two thousand thirteen ended up being this banner year for 0:04:21.800 --> 0:04:24.880 dollar stores, And in July of that year, so many 0:04:24.920 --> 0:04:27.360 new locations open that it averaged out to one new 0:04:27.440 --> 0:04:31.440 store opening every six hours all month long. That's interesting. 0:04:31.480 --> 0:04:34.280 It does feel like too many dollar stores if we're 0:04:34.279 --> 0:04:38.560 being so how many nights? You don't? You disagree strongly said, so, 0:04:38.560 --> 0:04:41.159 how many are we up to now? So all told, 0:04:41.240 --> 0:04:43.440 there are more than thirty thousand dollar stores in the 0:04:43.520 --> 0:04:46.240 US right now, And according to Forest, that's more locations 0:04:46.279 --> 0:04:49.360 than the six biggest US retailers put together. So that's 0:04:49.400 --> 0:04:55.240 like Walmart, Walgreens, CVS, Costco, Kroger, and Home Depot that's 0:04:55.240 --> 0:04:58.000 on this list here. So you know, the wildest part 0:04:58.040 --> 0:05:00.359 is that analysts say new dollar stores will key popping 0:05:00.440 --> 0:05:02.719 up like this for at least another three years before 0:05:02.760 --> 0:05:04.840 the demand levels out. You know, I'm guessing a good 0:05:04.839 --> 0:05:06.919 deal of that success is thanks to the strategy you 0:05:06.920 --> 0:05:09.000 we're talking about at the beginning of the show, like 0:05:09.000 --> 0:05:10.919 the way dollar store brands tend to divvy up the 0:05:10.960 --> 0:05:14.360 market between themselves so together they've got a lock on 0:05:14.360 --> 0:05:17.440 on really like every person who might potentially shop at 0:05:17.480 --> 0:05:20.039 a dollar store. That's right, And and dollar stores really 0:05:20.080 --> 0:05:22.440 do have a much more mixed income clientele than you 0:05:22.520 --> 0:05:24.920 might guess, But that comes with some issues as well, 0:05:24.960 --> 0:05:26.960 Like one of the big concerns with having a high 0:05:27.040 --> 0:05:29.800 number of dollar stores is that the company's mostly targets 0:05:29.839 --> 0:05:33.920 struggling communities when opening new locations, and as a result, 0:05:34.120 --> 0:05:36.880 a single small talent or a city neighborhood can wind 0:05:36.960 --> 0:05:39.839 up with three or four different dollar stores but no 0:05:40.000 --> 0:05:43.640 actual grocery stores, which obviously is an ideal, since most 0:05:43.680 --> 0:05:46.839 dollar stores don't carry fresh fruits or vegetables or meats. Alright, 0:05:46.880 --> 0:05:49.679 so dollar stores can and do contribute to the problem 0:05:49.720 --> 0:05:52.800 of what we call like food deserts. But but you're 0:05:52.800 --> 0:05:55.720 saying that high earners shop at dollar stores too, Yeah, 0:05:55.760 --> 0:05:58.280 and in much larger volume than you might expect. So 0:05:58.680 --> 0:06:01.240 according to this two thousands sick Team report from Reuter's 0:06:01.800 --> 0:06:05.040 twenty nine, of millennial households earning more than a hundred 0:06:05.040 --> 0:06:07.520 thousand dollars per year say they shop at least one 0:06:07.520 --> 0:06:10.480 of the big three dollar chains. So all together, these 0:06:10.480 --> 0:06:13.880 schoppers make up roughly I guess of the total sales 0:06:13.920 --> 0:06:16.720 from those three chains. And it's pretty shocking when you 0:06:16.720 --> 0:06:19.560 think about it. But it also makes sense since everyone 0:06:19.800 --> 0:06:22.720 you know likes a bargain. Yeah. Well, well, speaking of bargains, 0:06:22.760 --> 0:06:25.040 that was something I wondered about this week, Like our 0:06:25.080 --> 0:06:29.000 dollar store prices actually a good deal, So of course 0:06:29.040 --> 0:06:30.960 we had to look into this, and it turns out 0:06:30.960 --> 0:06:34.320 that no, they're really not, or at least not always so. 0:06:34.640 --> 0:06:37.960 For example, dollar stores tend to sell milk in sixteen 0:06:37.960 --> 0:06:41.599 ounce bottles for one dollar each, which does sound like 0:06:41.640 --> 0:06:44.279 a steal, but at that rate, you're actually paying eight 0:06:44.320 --> 0:06:48.400 dollars for a full gallon, which sounds like New York prices. 0:06:49.480 --> 0:06:51.600 Maybe don't shop for milk at dollar stores. But what 0:06:51.640 --> 0:06:54.440 about like the non perishable items, that kind of stuff 0:06:54.520 --> 0:06:56.400 like you wouldn't really see the same kind of markup 0:06:56.440 --> 0:06:58.360 on right, Well, it depends. I mean you you can 0:06:58.440 --> 0:07:00.400 end up with the same type of despair atty when 0:07:00.400 --> 0:07:03.560 you look at something like raisins or aluminum foil. Like 0:07:03.600 --> 0:07:06.040 The trick in all of these cases is to offer 0:07:06.200 --> 0:07:10.920 familiar products and slightly smaller packages, so most shoppers don't 0:07:10.920 --> 0:07:13.440 spot the size differences or do an ounce to ounce 0:07:13.480 --> 0:07:16.400 cost breakdown when they're in the aisle. But that said, 0:07:16.400 --> 0:07:20.120 there are some dollar store products that are generally solid deals, 0:07:20.200 --> 0:07:24.000 like toiletries paper goods, for example, and you can buy 0:07:24.000 --> 0:07:26.200 a roll of wrapping paper or a giant tub of 0:07:26.280 --> 0:07:29.120 cotton swabs for half the price that you would at 0:07:29.120 --> 0:07:30.960 a big box store. So keep that in mind next time. 0:07:30.960 --> 0:07:34.720 You love the idea of buying wrapping paper and just uh, 0:07:34.840 --> 0:07:36.880 you know, putting it around cotton swabs. So it feels 0:07:36.920 --> 0:07:39.360 like that makes a lot of sense to meaing. Yeah, well, 0:07:39.400 --> 0:07:41.720 there's another dollar store perk that I learned this week, 0:07:41.760 --> 0:07:44.000 because even though shopping at the dollar store may not 0:07:44.120 --> 0:07:46.440 always give you the most bang for your buck, it 0:07:46.640 --> 0:07:49.200 is a good way to satisfy your shopping craving on 0:07:49.240 --> 0:07:52.480 a budget. So if you're someone who enjoys going shopping, 0:07:52.520 --> 0:07:55.400 then you're probably familiar with the small rush of pleasure 0:07:55.440 --> 0:07:58.640 that comes from just making a purchase, and you can 0:07:58.680 --> 0:08:01.960 actually think your brain for that. So whenever we anticipate 0:08:01.960 --> 0:08:04.760 a reward, which in this case would be buying something new, 0:08:05.160 --> 0:08:08.800 our brains respond by triggering this kick of dopamine. So 0:08:08.880 --> 0:08:12.080 for an average shopper, the more things you buy, the 0:08:12.160 --> 0:08:15.640 more dopamine levels rise, which you know, I guess is 0:08:15.640 --> 0:08:19.160 why some people become compulsive shoppers, right, Yeah, that's exactly right. 0:08:19.200 --> 0:08:22.040 And so that's where dollar stores come in because for 0:08:22.080 --> 0:08:25.120 most people, the pleasure we get from shopping doesn't always 0:08:25.160 --> 0:08:28.200 scale with the amount of money we're spending. So instead 0:08:28.360 --> 0:08:30.960 is that number of items that we might buy, so 0:08:31.080 --> 0:08:34.559 each one translates into its own little kick of dopamine. 0:08:34.880 --> 0:08:36.920 So the next time you feel the urge for a 0:08:36.960 --> 0:08:39.760 shopping spree, you might want ahead your local dollar store 0:08:39.800 --> 0:08:41.640 because you can fill the basket on the cheap and 0:08:41.679 --> 0:08:44.640 still walk out feeling like a million bucks. I'm sure 0:08:44.679 --> 0:08:47.880 that's exactly how it would play out. All right, Well, 0:08:48.000 --> 0:08:50.160 now that we've talked a little bit about who's shopping 0:08:50.200 --> 0:08:52.120 at dollar stores, let's look at some of the products 0:08:52.160 --> 0:09:08.520 that are buying there. But first a quick break. You're 0:09:08.559 --> 0:09:10.520 listening to part time Genius and we're talking about the 0:09:10.600 --> 0:09:14.319 best and worst deals to be had at the dollar store. Now, 0:09:14.320 --> 0:09:16.480 speaking of which, the time has come at last, Mango, 0:09:16.679 --> 0:09:20.720 we need to talk about the one dollar steaks. I love, 0:09:21.000 --> 0:09:23.320 like how offended you were by this, Like we were 0:09:23.320 --> 0:09:26.480 talking about this beforehand. It just feels ridiculous, and it's 0:09:26.520 --> 0:09:28.160 not like someone's actually gonna force you to eat what 0:09:28.280 --> 0:09:31.600 it is. It's the principle of the thing, Mango. But 0:09:32.280 --> 0:09:34.040 I feel like we should back up a minute because 0:09:34.080 --> 0:09:36.520 some listeners out there might be a wee bit confused 0:09:36.520 --> 0:09:38.640 by all of this talk of a one dollar steak. 0:09:39.000 --> 0:09:42.200 So we mentioned earlier that dollar stores don't usually carry 0:09:42.280 --> 0:09:45.480 fresh foods, but a growing number of them do stock 0:09:45.559 --> 0:09:48.600 frozen foods now And one of the best or worst 0:09:48.640 --> 0:09:51.480 deals is the one dollar ribby and the dollar Tree 0:09:51.559 --> 0:09:55.439 freezer section. So these four ounds boneless beef steaks are 0:09:55.440 --> 0:09:59.240 sold preseasoned in a brine, and they're what's called you know, 0:09:59.280 --> 0:10:01.600 the util the cut I guess, which are the parts 0:10:01.640 --> 0:10:05.200 of the cow used, and institutional kitchens. So the stakes 0:10:05.200 --> 0:10:08.559 Dollar Tree cells are sourced from a company called Stampede 0:10:08.600 --> 0:10:10.800 Meat Ink. I'm really jealous. I wish I had started 0:10:10.840 --> 0:10:13.719 a company called Stampede Meeting. It's like the worst name. 0:10:13.760 --> 0:10:15.880 It sounds like they sell steaks made from cows that 0:10:15.920 --> 0:10:20.560 got trampled by bigger cows. Well, you never know, but 0:10:21.040 --> 0:10:23.520 if you're feeling adventurous, you can buy one of these 0:10:23.520 --> 0:10:26.000 one dollar steaks for yourself at any dollar Tree with 0:10:26.080 --> 0:10:29.280 a freezer section. And if you read the reviews online, 0:10:29.280 --> 0:10:31.640 a lot of people compare the meat to you know, 0:10:31.720 --> 0:10:34.199 say rubber, or or maybe they just say it doesn't 0:10:34.280 --> 0:10:37.640 cook that well. So I'm really curious. Now, so did 0:10:37.640 --> 0:10:40.360 you find anyone who actually liked these one dollar sticks? 0:10:40.720 --> 0:10:43.880 I did find one positive review but even then, the 0:10:43.920 --> 0:10:46.959 one who actually bought the steak, she didn't like it. 0:10:47.600 --> 0:10:50.319 So why is that? Why is that a positive review? 0:10:50.520 --> 0:10:54.160 Well because her dog apparently did love it. So to 0:10:54.240 --> 0:10:57.559 be fair, I did come across some surprisingly measured responses 0:10:57.600 --> 0:11:00.920 from actual humans. So, for example, in two thousand and sixteen, 0:11:01.000 --> 0:11:03.760 a TV station in Cincinnati held a taste test for 0:11:03.880 --> 0:11:07.640 local firefighters. So they were asked to sample a butcher's cut, 0:11:08.000 --> 0:11:10.959 a supermarket cut, and of course the one dollar ribbi. 0:11:11.520 --> 0:11:14.640 And the reactions were mixed among the firefighters you might expect, 0:11:14.720 --> 0:11:17.640 but some of the more positive views were it's not 0:11:17.840 --> 0:11:25.880 terrible and I guess it was meat. Okay. So here's 0:11:25.920 --> 0:11:27.720 another product you probably didn't know you could buy at 0:11:27.760 --> 0:11:29.480 the dollar store, or at least I didn't know you 0:11:29.480 --> 0:11:31.920 could buy it, And that's a home pregnancy test kit. 0:11:32.400 --> 0:11:35.600 But unlike those one dollar ribbis, these pregnancy kits are 0:11:35.640 --> 0:11:38.720 actually worth the money. In fact, the ones carried at 0:11:38.760 --> 0:11:40.880 a lot of I guess the dollar tree stores are 0:11:40.920 --> 0:11:44.160 the same kind used in most hospitals. Oh wow, I mean, 0:11:44.160 --> 0:11:46.000 maybe this is a bit unfair, but I'd be so 0:11:46.120 --> 0:11:49.440 hesitant to trust a one dollar pregnancy test. I mean 0:11:49.440 --> 0:11:52.600 that that feels so cheap for that purpose, Like, how 0:11:52.600 --> 0:11:55.240 could it actually be reliable? So I was wondering about 0:11:55.240 --> 0:11:57.480 this myself, and it turns out the tests are are 0:11:57.480 --> 0:12:00.679 actually pretty reliable, and that's because most Nancy tests are 0:12:00.679 --> 0:12:05.000 made to detect just one specific hormone that's produced during pregnancy. 0:12:05.120 --> 0:12:07.520 It's like a simple enough task that most kits can 0:12:07.559 --> 0:12:10.000 pull it off regardless of the price. But you know, 0:12:10.080 --> 0:12:11.920 that's not to say there aren't advantages to using a 0:12:11.960 --> 0:12:14.880 more expensive test. You know, they can often detect lower 0:12:14.920 --> 0:12:17.719 amounts of that same hormone earlier in the pregnancy, so 0:12:17.840 --> 0:12:19.680 you know, a Dollar Store kit might not show that 0:12:19.679 --> 0:12:22.160 the woman is pregnant until a little later in the pregnancy. 0:12:22.280 --> 0:12:24.640 I do love how the steak is super shady, but 0:12:24.679 --> 0:12:27.960 like the pregnancy tests, we feel like they're so trustworthy. 0:12:28.120 --> 0:12:30.400 I guess it kind of balances each other out. Well. 0:12:30.480 --> 0:12:32.840 What's funny is that, like one of the other items 0:12:32.880 --> 0:12:35.880 that Dollar Tree carries that supposedly like this hidden gem 0:12:36.360 --> 0:12:39.280 is their ovulation predictor, it actually has one of the 0:12:39.360 --> 0:12:42.800 highest product rankings of all the Dollar Tree items. I 0:12:42.800 --> 0:12:45.720 guess it's got four point six stars, and the customer 0:12:45.720 --> 0:12:47.520 reviews say it works just as well as the more 0:12:47.520 --> 0:12:49.520 expensive brands. I feel like we might just have to 0:12:49.559 --> 0:12:51.560 take their word for that, But for now, I thought 0:12:51.559 --> 0:12:54.280 we could switch gears and talk about something I've always 0:12:54.320 --> 0:12:57.760 wondered about, which is how dollar stores actually make money. 0:12:57.920 --> 0:12:59.679 I feel like it's just through something a lot of 0:12:59.720 --> 0:13:02.319 stay can, pregnancy cuts, It's all there is. I mean, 0:13:02.360 --> 0:13:04.640 I guess that is true, but I meant more like, 0:13:04.640 --> 0:13:07.520 how do dollar stores turn a profit off of these, 0:13:07.600 --> 0:13:10.640 you know, really inexpensive products. But before we get into that, 0:13:10.679 --> 0:13:27.080 let's take one more quick break. Welcome back to part 0:13:27.080 --> 0:13:29.440 time genius. All right, Mango, So, another thing I was 0:13:29.480 --> 0:13:32.120 curious about this week is how dollar stores managed to 0:13:32.200 --> 0:13:35.840 turn profits off of you know, these really inexpensive items. 0:13:35.880 --> 0:13:38.920 Because I found some sales figures from a few years back, 0:13:38.960 --> 0:13:41.439 and I was shocked to see that Dollar Tree makes 0:13:41.520 --> 0:13:45.120 thirty five cents of profit for each dollar of revenue, 0:13:45.160 --> 0:13:47.839 compared to twenty four cents per dollar that you know, 0:13:47.880 --> 0:13:50.720 place like Walmart makes, which is surprising because you always 0:13:50.720 --> 0:13:53.200 hear about how well Walmart negotiates down prices, you know, 0:13:53.280 --> 0:13:55.320 just because of all the volume they sell. Right, So 0:13:55.640 --> 0:13:57.520 it may be wonder like, is it just the high 0:13:57.600 --> 0:14:00.240 sales volume at a dollar store that helps make up 0:14:00.240 --> 0:14:03.240 for the low prices or is there more going on? 0:14:03.320 --> 0:14:06.080 And what I found is that while volume does play 0:14:06.120 --> 0:14:08.640 a huge part, a lot of what makes dollar stores 0:14:08.720 --> 0:14:12.040 profitable is that they have this no frills approach to 0:14:12.200 --> 0:14:15.520 the shopping experience. For instance, at a big box store 0:14:15.600 --> 0:14:18.720 like a Walmart, you're looking at nearly two hundred thousand 0:14:18.800 --> 0:14:22.280 square feet of shopping space. They're just enormous. But I meanwhile, 0:14:22.320 --> 0:14:25.920 the average Dollar general is just over seven thousand square feet. 0:14:26.000 --> 0:14:28.280 I guess that's a smaller box. It is. It's it's 0:14:28.320 --> 0:14:31.080 a much smaller boxing. Maybe even if you're not good 0:14:31.120 --> 0:14:33.840 at math, like that is a much smaller boxing. Not 0:14:34.000 --> 0:14:37.440 only does the smaller footprint translate into lower leasing costs, 0:14:37.480 --> 0:14:39.440 it also means that the dollar stores don't need to 0:14:39.520 --> 0:14:42.880 hire as many workers. In fact, a typical dollar store 0:14:42.920 --> 0:14:45.600 staff is made up of just eight or nine people, 0:14:45.960 --> 0:14:49.600 while the average Walmart staff is closer to three hundred people. 0:14:49.960 --> 0:14:52.440 So all of this together helps keep down the overhead 0:14:52.480 --> 0:14:55.200 cost and that, along with the high volume of sales, 0:14:55.320 --> 0:14:57.440 is why dollar stores are some of the most profitable 0:14:57.440 --> 0:15:00.520 stores in the entire retail sector. Well, you know, since 0:15:00.520 --> 0:15:02.440 we're talking about what sets dollar stores apart from the 0:15:02.560 --> 0:15:05.200 larger cousins. I do want to highlight what is probably 0:15:05.240 --> 0:15:08.400 my biggest beef with these, you know, quote dollar stores, 0:15:08.480 --> 0:15:10.600 which is that, you know, somewhere along the line, most 0:15:10.640 --> 0:15:14.560 dollar stores became dollar and up stores, like even cents 0:15:14.640 --> 0:15:17.400 only stores now sell products for more than cents. So 0:15:17.920 --> 0:15:20.040 now you can walk into dollar stores and find items 0:15:20.040 --> 0:15:23.240 that cost to five and as much as ten dollars. Yeah, 0:15:23.280 --> 0:15:26.080 more more like multi dollar stores, I guess, yeah, just 0:15:26.120 --> 0:15:30.520 like regular stores, which feels like borderline false advertising, but 0:15:30.840 --> 0:15:34.280 you know, it's becomfretty accepted at this point. So none 0:15:34.280 --> 0:15:37.160 of the big dollar chains still charged just a dollar. 0:15:37.440 --> 0:15:40.480 We actually looked into this, and it seems that, uh, 0:15:40.560 --> 0:15:42.800 I guess, the one dollar pricing has been dollar Tree's 0:15:42.840 --> 0:15:45.800 claim to fame for their entire existence. For the thirty 0:15:45.800 --> 0:15:47.760 three years it's been in business, the company has always 0:15:47.760 --> 0:15:51.160 stuck to its original policy. And you know that that's 0:15:51.400 --> 0:15:56.960 despite like inflation, despite growing competition, uh, manufacturing costs, whatever, like, 0:15:57.000 --> 0:15:59.360 despite all of that, Dollar Tree execs have kind of 0:15:59.400 --> 0:16:02.160 stood by this one dollar policy for everything in their store. 0:16:03.160 --> 0:16:06.320 I'm guessing there's there's a butt coming to this. Yeah. So, 0:16:06.400 --> 0:16:09.320 so the company finally about to pressure from some of 0:16:09.360 --> 0:16:12.560 its investors recently, and according to a company statement made 0:16:12.560 --> 0:16:16.600 in March two, dollar Tree has now begun testing additional 0:16:16.640 --> 0:16:19.160 price points in some of its stores. And you know, 0:16:19.320 --> 0:16:22.160 if the move boost profits at the test stores, like 0:16:22.200 --> 0:16:24.400 the investors hope it will do, then chances are will 0:16:24.440 --> 0:16:26.880 likely be seeing you know, dollar plus items in all 0:16:26.920 --> 0:16:30.080 their store shelves before the years out. Yeah so, so, 0:16:30.120 --> 0:16:33.360 in other words, stock up on those one dollar ribbi's, right, 0:16:33.360 --> 0:16:35.440 because you know they could be three dollar ribbis or 0:16:35.440 --> 0:16:38.400 whatever the next few years. I mean, it is kind 0:16:38.440 --> 0:16:40.480 of sad that like these may very well be the 0:16:40.520 --> 0:16:43.120 final days of the last true dollar store if you 0:16:43.160 --> 0:16:45.120 think about it, Yeah, it's the end of an era. 0:16:45.240 --> 0:16:47.280 But if you're looking for something that you can still 0:16:47.360 --> 0:16:49.560 get on the super Chief, we've got a boatload of 0:16:49.640 --> 0:16:52.560 facts at very reasonable prices. So why don't we do 0:16:52.600 --> 0:17:05.160 the fact off? Okay, so we started the show talking 0:17:05.160 --> 0:17:07.840 about how dollar stores are pretty much everywhere these days, 0:17:07.880 --> 0:17:09.639 and it feels like one is never more than a 0:17:09.680 --> 0:17:12.359 few miles away at any given time, And it turns 0:17:12.400 --> 0:17:16.040 out that's actually true. So Dollar General has over fifteen 0:17:16.080 --> 0:17:19.280 thousand stores spread throughout forty four states, and according to 0:17:19.320 --> 0:17:23.480 the company, that means the US population now lives within 0:17:23.600 --> 0:17:25.960 just five miles of one of its stores. All right, 0:17:26.000 --> 0:17:27.520 well here's a quick one. So when you're in the 0:17:27.600 --> 0:17:30.439 big box stores, you really think of the tricks that 0:17:30.480 --> 0:17:33.199 they use to get people to, you know, go for 0:17:33.240 --> 0:17:36.119 the impulse buys or things like that, and actually dollar 0:17:36.160 --> 0:17:39.000 stores use many of the same tricks. So, for example, 0:17:39.080 --> 0:17:41.680 drug stores tend to put food and drinks up front 0:17:41.760 --> 0:17:45.120 to act as these impulse buys, but the actual pharmacies 0:17:45.160 --> 0:17:47.600 are tucked in the very back of the store, and 0:17:47.680 --> 0:17:50.919 dollar stores act under the same principle. So food and 0:17:51.040 --> 0:17:53.280 toys or stocked in the back of the store since 0:17:53.320 --> 0:17:56.080 they tend to be the most popular items and sees, 0:17:56.160 --> 0:17:59.040 the impulse buys go right up front near the registers. 0:17:59.359 --> 0:18:02.320 So unfortunately, one place where dollar stores do different from 0:18:02.400 --> 0:18:06.360 larger stores is that they typically don't offer employee discounts, 0:18:06.680 --> 0:18:09.560 so unless a product is damaged or open on the shelf, 0:18:09.880 --> 0:18:13.760 employees have to pay the full dollar like everybody else. Well, 0:18:13.880 --> 0:18:16.240 paying full price is always a drag, but if you 0:18:16.320 --> 0:18:18.600 ask some dollar store employees, they'll tell you that the 0:18:18.640 --> 0:18:20.639 worst part of their job is having to deal with 0:18:20.640 --> 0:18:24.000 the dreaded Hot Wheels toy collectors, and that's actually not 0:18:24.119 --> 0:18:27.960 exclusive to Dollar stores either, So over zealous Hot Wheels 0:18:27.960 --> 0:18:30.680 fans are actually kind of the bane of any retail 0:18:30.760 --> 0:18:33.200 store that stocks them. Really, I don't get it. What's 0:18:33.200 --> 0:18:36.320 so bad about kids who collect toy cars? So nothing 0:18:36.320 --> 0:18:38.639 at all. It's actually the adults who collect toys that 0:18:38.680 --> 0:18:41.359 are the problem. And there's a big community of adult 0:18:41.440 --> 0:18:43.879 Hot Wheels fans out there, and they're kind of infamous 0:18:43.920 --> 0:18:47.160 for well, I mean, you can call it their dedications. 0:18:47.160 --> 0:18:49.760 So so Metal Fliss had a piece last year where 0:18:49.800 --> 0:18:52.119 they spoke to a Dollar Tree manager named Nate, and 0:18:52.119 --> 0:18:54.840 according to him, these so called Hot Wheels hunters will 0:18:54.920 --> 0:18:57.760 quote scour the Internet and find out when stores are 0:18:57.760 --> 0:19:00.439 getting shipments, then show up and demand I go to 0:19:00.480 --> 0:19:02.440 find the one box of hot Wheels out of two 0:19:02.480 --> 0:19:04.600 thousand other boxes so that they can be the first 0:19:04.600 --> 0:19:07.199 to buy the I mean that does sound like a 0:19:07.200 --> 0:19:09.520 headache for the employees, especially if these guys are showing 0:19:09.600 --> 0:19:11.760 up like every week to do this. I mean, it's 0:19:11.800 --> 0:19:13.600 more of a nightmare than that they fairly show up 0:19:13.680 --> 0:19:16.560 every day. In a lot of cases, and so the 0:19:16.560 --> 0:19:18.879 collectors who go to local stores every morning when it 0:19:18.880 --> 0:19:22.080 opens are actually have a name, and and they go 0:19:22.240 --> 0:19:24.560 by the name door Warmers. All right. Well, still that 0:19:24.600 --> 0:19:27.280 fact is a nice reminder that dollar stores do indeed 0:19:27.320 --> 0:19:30.680 stocks and brand name products like hot wheels. But one 0:19:30.720 --> 0:19:32.879 thing you might not know is that some dollar stores 0:19:32.960 --> 0:19:36.240 even have their own in house or private label brands. 0:19:36.320 --> 0:19:38.800 And we usually think of these with the like big 0:19:38.840 --> 0:19:42.680 box stores. But the most successful example is probably Dollar 0:19:42.800 --> 0:19:46.200 General's line of healthcare products, which the company sells under 0:19:46.200 --> 0:19:48.840 the brand name rex All. So it's a it's a 0:19:48.840 --> 0:19:51.159 strategy that's paid off for Dollar General to like. The 0:19:51.200 --> 0:19:53.880 rex All brand now accounts for more than two hundred 0:19:53.960 --> 0:19:57.920 million dollars of the company's annual sales. Here's the weird 0:19:57.920 --> 0:20:00.280 one I found. So the founder of Walmart one of 0:20:00.280 --> 0:20:02.679 the founders of Dollar Tree both got their start in 0:20:02.720 --> 0:20:05.920 business by running the same kind of chain store. Uh. 0:20:05.920 --> 0:20:08.080 These were called Ben Franklin stores, and some of the 0:20:08.080 --> 0:20:11.160 franchise stores are actually still around today. You can think 0:20:11.160 --> 0:20:13.160 of them kind of as the prototype to dollar stores. 0:20:13.200 --> 0:20:15.280 They had lots of different items like a general store, 0:20:15.320 --> 0:20:18.560 but sold at discount prices, and these dollar and up 0:20:18.680 --> 0:20:20.800 Ben Franklin Stores turned out to be a great way 0:20:20.840 --> 0:20:23.560 for both Sam Walton and kr Perry to learn the 0:20:23.640 --> 0:20:27.240 ropes of retail, and after cutting their teeth as franchise owners, 0:20:27.280 --> 0:20:29.960 both men soon went on to establish successful chain stores 0:20:29.960 --> 0:20:32.240