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Speaker 1: My name is David Williams. I'm a stock at Dollar General,

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Speaker 1: and I'm one of the hundreds of thousands of Dollar

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Speaker 1: General employees who come into work every day scared for

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Speaker 1: our safety. We're scared because we know that the leaders

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Speaker 1: of Dollar General are not looking out for the safety

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Speaker 1: of workers. The company has expanded so fast and so

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Speaker 1: recklessly that on any given day, I might have to

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Speaker 1: deal with a rat infestation, a door that won't lock,

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Speaker 1: or some one point of a gun at me with

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Speaker 1: no security to protect me.

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Speaker 2: Last week, we talked about the tough lives of retail

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Speaker 2: workers these days and the challenge is facing brick and

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Speaker 2: mortar stores in an increasingly online marketplace. Today, a closer

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Speaker 2: look at one of the most visible retailers in the US,

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Speaker 2: Dollar General. With nineteen thousand plus locations, there are more

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Speaker 2: Dollar Generals in America than Walmart's and Wendy's rest Rants combined.

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Speaker 2: The company's success is based on selling common necessities for less,

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Speaker 2: but Bloomberg's Brendan Case and Josh Idelson report about the

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Speaker 2: downside of Dollar General's desire to squeeze out profits by

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Speaker 2: also operating the stores themselves as cheaply as possible. The

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Speaker 2: company is racked up fines for soiled merchandise, expired food

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Speaker 2: left on shelves, and stores that are often dirty and unsafe.

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Speaker 2: I'm Westksova today on the big take the high price

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Speaker 2: of low prices. Josh, I have to say this story

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Speaker 2: makes for some pretty shocking reading. How did you come

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Speaker 2: up with the idea of writing about Dollar General?

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Speaker 3: Well.

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Speaker 4: Dollar General came on to our radar because the US

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Speaker 4: Workplace Safety Agency OSHA had repeatedly cited them. They also

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Speaker 4: put Dollar General on their severe Violator list of companies

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Speaker 4: that were, in the agency's view, showing particular disregard for workers' rights,

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Speaker 4: and it was the first time a national retail company

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Speaker 4: had been placed on that list. So there were tea

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Speaker 4: leaves that suggested that something peculiar was going on here,

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Speaker 4: and something that our readers that BusinessWeek might not expect

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Speaker 4: from a retail company. People are more used to the

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Speaker 4: idea that a job like warehousing or construction or logging

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Speaker 4: could come with risks to the worker's health. A lot

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Speaker 4: of people think of retail as not a great job,

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Speaker 4: but presumably a safe job, and so we were eager

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Speaker 4: to figure out what's going on and we did that

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Speaker 4: really through two threads, one of which was thousands of

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Speaker 4: pages of documents that took months of public records requests

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Speaker 4: and follow up to shake loose from states around the

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Speaker 4: country as well as from federal OSHA. And the other

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Speaker 4: thread was talking to people in these stores, traveling around

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Speaker 4: the country to Oklahoma to Louisiana to Florida, talking to

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Speaker 4: people who've worked in these stores at the hourly level

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Speaker 4: as well as people who've been in management at the

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Speaker 4: store level or above the store level, and trying to

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Speaker 4: identify patterns in what the safety experts from the government

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Speaker 4: were finding and what the people who've worked in or

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Speaker 4: are still working in these stores are experiencing.

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Speaker 2: And Brendan, through all those documents or all the interviews

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Speaker 2: that you did with employees and others, you paint a

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Speaker 2: very vivid picture. Can you describe for us what you found?

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Speaker 3: So based on our reporting, we found lots of evidence

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Speaker 3: of stores being in very rocky shape. There are stores

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Speaker 3: where there are products that are way past their due date,

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Speaker 3: you know, whether it's yogurt, crackers, even in some cases

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Speaker 3: baby products. We found stores that were quite dirty at times,

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Speaker 3: which is a common complaint. You hear among communities who

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Speaker 3: oppose the expansion of dollar generals.

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Speaker 2: And you spoke to one dollar a general employee who

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Speaker 2: describes this very thing.

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Speaker 3: Yes, his name is Joseph Tinker, and he worked at

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Speaker 3: the store in Apache, Oklahoma. And in this case, there

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Speaker 3: were colonies of sparrows and blackbirds that nested in the ceiling.

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Speaker 3: They got in through a hole in the roof. They

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Speaker 3: ended up nesting and laying eggs and began regularly going

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Speaker 3: to the bathroom on the goods. His bosses wouldn't let

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Speaker 3: him throw this merchandise out. This included pillows stained with feces. Instead,

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Speaker 3: the employees were ordered to clean the goods, in some

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Speaker 3: cases by taking them home to wash and returning them

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Speaker 3: back to the shelves.

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Speaker 4: One of the most striking moments for me and reporting

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Speaker 4: this story was meeting up in Oklahoma with Joseph and

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Speaker 4: his now husband, Josh, who was the manager of the store.

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Speaker 4: They both left the store when there was a walkout

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Speaker 4: and mass resignation last year over being forced to work

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Speaker 4: without functioning air conditioning. We went back into that store

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Speaker 4: and I was struck seeing the shelving that was propped

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Speaker 4: up with milk crates the lack of light in the bathroom,

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Speaker 4: the bugs, both living and dead, the rusty equipment, the

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Speaker 4: unhinged doors, the yellowish puddles on the floor, and Josh

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Speaker 4: and Joseph they noticed those things too, but their takeaway

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Speaker 4: was that the store has improved since when they were there,

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Speaker 4: because now the air conditioning is working.

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Speaker 3: We talked with one worker who, in his first months

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Speaker 3: on the job was told by a manager to purposefully

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Speaker 3: block exits with merchandise as a way to deter would

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Speaker 3: be shoplifters, and that store actually burned to the ground

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Speaker 3: a couple of years after this employee started working there.

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Speaker 1: There was one time I seen an exit filled with

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Speaker 1: stacks of water like cases.

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Speaker 3: That the cases that the cases of water.

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Speaker 2: That was employee David Williams. We also heard him at

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Speaker 2: the very top of the show addressing Dollar General shareholders,

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Speaker 2: and we'll hear a bit more of what he had

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Speaker 2: to say at that meeting in a minute.

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Speaker 4: David Williams has been working for four years four Dollar General.

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Speaker 4: He's someone who knows about worst case scenarios, having been

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Speaker 4: made a refugee by Hurricane Katrina as a teenager, and

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Speaker 4: he was painted about blocking the exits and then after

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Speaker 4: the fire, seeing the lack of change. He's someone who's

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Speaker 4: committed himself to trying to change the company. He's part

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Speaker 4: of this growing confederation of different sorts of advocates and

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Speaker 4: activists within and outside the company. In fact, with a

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Speaker 4: proxy from a friendly shareholder, he went to Dollar General's

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Speaker 4: shareholder meeting in May. Activists with brass band marched to

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Speaker 4: the meeting and David Williams and a couple of colleagues

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Speaker 4: went inside and he stood and confronted the company and

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Speaker 4: described the conditions he's experienced and that other workers have experienced,

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Speaker 4: and urged approval of a shareholder resolution and.

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Speaker 1: Also the OSHA Addeddology Unable to Severe Violated lists dedicated

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Speaker 1: to employers who have wilful repeated safety violations. These violators

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Speaker 1: include oles, emergency exits, fire extinguishers, and electrical panels blocked

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Speaker 1: by boxes of merchandise stacked up the six feet high.

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Speaker 1: This is all made worse by the serious level of understaffing.

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Speaker 1: It is not uncommon for a worker to be alone

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Speaker 1: in the store at night in areas where robberies commonly occur.

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Speaker 4: There are people who've been in management at the company

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Speaker 4: who say they put in tickets in Dollar General's internal system,

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Speaker 4: and their concerns were ignored. One woman who was a

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Speaker 4: district manager told us that she spent months just trying

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Speaker 4: to get outside lights replaced at a store where workers

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Speaker 4: were clocking out in dark wakness, and was told eventually

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Speaker 4: she needed to provide a photo to show how dark

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Speaker 4: it was late at night before the lights could be replaced.

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Speaker 4: Workers have described issues with being cut by faulty equipment,

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Speaker 4: with what they see as regular fire hazards, also with

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Speaker 4: threats of violence from customers. One man I talked to

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Speaker 4: said he quit his job because someone was taking products

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Speaker 4: and he followed what he had been told was this

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Speaker 4: vague directive to stop people from stealing, and then the

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Speaker 4: man threatened to kill him, and so he the worker

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Speaker 4: decided to go work somewhere else. And a through line

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Speaker 4: in many of these issues about dealing with potential threats

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Speaker 4: from other people in the stores about the expired products

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Speaker 4: of also that workers have seen that we've seen a

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Speaker 4: common theme here is staffing. That workers say there aren't

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Speaker 4: enough people to look out for each other, to out

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Speaker 4: for customers in terms of the ability to move through

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Speaker 4: the store, the quality of the products, that this model

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Speaker 4: that has let the company grow very quickly and save

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Speaker 4: a lot of money, has come at a real cost

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Speaker 4: in all of these ways.

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Speaker 2: And Brendon, you went to Dollar General and presented them

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Speaker 2: with your findings. What did they say about all of this?

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Speaker 3: Dollar General had a few things to say to us,

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Speaker 3: and one of them is that they strive to be

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Speaker 3: a force for opportunities in the communities that they serve,

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Speaker 3: and they take their responsibility to provide a safe and

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Speaker 3: healthy working environment seriously.

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Speaker 2: And it's statement to BusinessWeek about this story. Dollar General

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Speaker 2: also said they work with their store teams to promptly

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Speaker 2: address any issues. The company said when they learn of

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Speaker 2: maintenance or repair needs in or around their stores, they

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Speaker 2: take prompt action, and they said they have various cleaning protocols,

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Speaker 2: work with pest control firms, and will sometimes take other

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Speaker 2: steps to ensure a healthy and safe environment. The company

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Speaker 2: is contesting many of OSHA's citations and says it's implementing

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Speaker 2: additional safety trainings and compliance audits.

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Speaker 3: The company recently said it would spend an extra one

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Speaker 3: hundred and fifty million dollars this year to improve in

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Speaker 3: store conditions, and a lot of that money will go

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Speaker 3: to increase staffing. Whether that's enough, time will tell. They

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Speaker 3: didn't dispute the specific findings, and they said that they're

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Speaker 3: in talks for a settlement agreement with OSHA, the workplace

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Speaker 3: safety regulator. Where those talks end up, how they end up,

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Speaker 3: that remains to be seen.

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Speaker 2: After the break. How did Dollar General get to this place?

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Speaker 2: Brendan Josh earlier said that what's happening at Dollar General

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Speaker 2: is emblematic of their business model and how they operate.

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Speaker 2: What is Dollar General's business model.

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Speaker 3: Dollar General's business model consists of selling basic goods at

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Speaker 3: a huge number of stores. They've blanketed the US with stores.

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Speaker 3: They've got nineteen thousand locations, that's more than any other

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Speaker 3: US retailer, and selling basic essentials at competitive prices, not

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Speaker 3: always the lowest price in the market, but competitive prices

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Speaker 3: in locations that are designed to be more convenient. And

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Speaker 3: then perhaps a Walmart supercenter, for example, that might be

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Speaker 3: located five, ten, fifteen, twenty miles from customers, especially in

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Speaker 3: rural areas, anybody without easy access to a car could

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Speaker 3: struggle getting there. And also going to a big store

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Speaker 3: is a big time commitment. Going to a Dollar General

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Speaker 3: means popping in and popping out. Most of the goods

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Speaker 3: they sell are consumables, and so you'll see a lot

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Speaker 3: of basic food items, you'll see a lot of packaged

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Speaker 3: food items, and you'll see a lot of non edible

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Speaker 3: but grocery items such as you know, paper products or

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Speaker 3: plates or what have you. And that model was refined

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Speaker 3: over time. The company's first store was opened in nineteen

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Speaker 3: fifty five, that's seven years before Sam Walton opened the

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Speaker 3: first Walmart. By the time the sun of the founder

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Speaker 3: stepped down early this century, the company had about six

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Speaker 3: thousand locations. It was then purchased by a private equity

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Speaker 3: group led by KKR in two thousand and seven. It

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Speaker 3: went public again in two thousand and nine, and that's

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Speaker 3: where it's growth really sorry to take off. They began

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Speaker 3: opening stores at a very high cadence. They were way

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Speaker 3: out pacing Walmart and target other big retailers in terms

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Speaker 3: of sales gains, powered in part by the proliferation of locations.

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Speaker 3: It's not necessarily a unique business model. Dollar Tree, which

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Speaker 3: is its biggest rival, has a similar model, at least

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Speaker 3: in a broadbrush perspective, but Dollar General has executed it better.

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Speaker 3: It has thousands more locations, and up until recently it

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Speaker 3: was far out pacing Dollar Tree in terms of sales

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Speaker 3: gains and market value.

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Speaker 2: Josh. One other really interesting thing in your story was that,

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Speaker 2: unlike a lot of stores were seem to be getting bigger,

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Speaker 2: Dollar Generals are very very small stores.

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Speaker 4: That's right. The average Dollar General store is around seventy

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Speaker 4: five hundred square feet. That's less than a fifth the

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Speaker 4: size of a typical neighborhood supermarket, let alone, compared to

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Speaker 4: a Walmart supercenter. You could probably hide a Dollar General

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Speaker 4: store inside of a Walmart supercenter and struggle to figure

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Speaker 4: out where you even put it. And part of what's

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Speaker 4: made that model work is not having a lot of

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Speaker 4: people in each of those stores. Sometimes there's only one

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Speaker 4: or two people, including a manager, on the property. On TikTok,

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Speaker 4: earlier this year, a customer posted about what she described

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Speaker 4: as the experience of having to watch over a store

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Speaker 4: herself as a random customer who'd come in that day,

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Speaker 4: so that the one employee working would have a chance

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Speaker 4: to go to the bathroom.

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Speaker 2: Brendan, Given the working conditions you describe, why do people

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Speaker 2: want to work a Dollar General?

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Speaker 3: About four of every five dollar General stores are located

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Speaker 3: in communities with fewer than twenty thousand people, and so

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Speaker 3: a lot of these stores are located in places where

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Speaker 3: the options of other places to work are relatively limited.

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Speaker 3: We spoke with one woman in Mississippi who said that

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Speaker 3: in her town, it's basically a question of working at

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Speaker 3: the Dollar General or working at the local chicken plant.

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Speaker 3: And just as their real estate strategy has to do

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Speaker 3: with convenience for customers' ease of getting there, that holds

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Speaker 3: true for workers too. It might be easier for many

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Speaker 3: employees to get to a local Dollar General than to

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Speaker 3: get to some other employer, particularly if they live in

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Speaker 3: more rural areas. All that said, the company is clearly

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Speaker 3: acknowledging the need to spend more on labor, and presumably

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Speaker 3: that extends to the challenge of attracting workers to work

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Speaker 3: there in the first place, in addition to giving them

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Speaker 3: the hours that many employees and store managers say are

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Speaker 3: needed to keep the stores in better conditions.

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Speaker 4: You know, a company like Walmart has gotten a lot

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Speaker 4: more scrutiny over the past decade than Dollar General, and

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Speaker 4: we've seen a combination of factors, including activism by workers

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Speaker 4: and scrutiny from lawmakers and the public forced Walmart to

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Speaker 4: make some changes, to the point that in twenty twenty one,

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Speaker 4: Walmart raised its minimum pay level to twelve dollars. It's

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Speaker 4: now at fourteen minimum at Walmart. That's a contrast with

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Speaker 4: Dollar General, where a study of survey data from twenty

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Speaker 4: twenty one showed that most workers at Dollar General made

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Speaker 4: less than twelve dollars an hour. In that close to

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Speaker 4: a quarter of them made less than ten dollars an hour.

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Speaker 2: When we come back, what comes next for America's most

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Speaker 2: prolific retailer, Brending, You described how the company has increased

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Speaker 2: the number of locations very very quickly. How profitable is it?

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Speaker 3: To put some numbers on that, net income last year

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Speaker 3: was about two point four billion dollars, that was fifty

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Speaker 3: percent higher than five years before, and sales were almost

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Speaker 3: thirty eight billion dollars, which was sixty percent more than

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Speaker 3: five years before.

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Speaker 2: And yet you write that recently Dollar General's share price

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Speaker 2: has fallen.

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Speaker 3: It's been a really tough year for Dollar General in

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Speaker 3: the stock market, and unusually so, in fact, since KKR

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Speaker 3: brought the company back to the public market gets in

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Speaker 3: two thousand and nine. The shares have actually never posted

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Speaker 3: an annual decline. It's looking like this year will break

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Speaker 3: that streak. And I'd say that you can point to

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Speaker 3: a few different problems. What is that lower income customers,

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Speaker 3: the kind of people that Dollar General caters to, are

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Speaker 3: really under rising financial pressure. That's just a given for

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Speaker 3: all retailers at this point, but it hits Dollar General

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Speaker 3: particularly hard. Another thing that is a big headwind for

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Speaker 3: Dollar General is increased competition. Walmart obviously has very competitive prices,

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Speaker 3: it also has services like home delivery that Dollar General

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Speaker 3: can't match.

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Speaker 2: And Josh, is there any indication that all of these

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Speaker 2: OSHA violations that you've talked about is having any effect

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Speaker 2: on the company's bottom line.

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Speaker 4: It was interesting talking to the head of OSHA, pointed

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Speaker 4: by Joe Biden, who acknowledged himself that OSHA does not

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Speaker 4: have the power to levy the sorts of fines that

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Speaker 4: other agency like the EPA might. His description of what

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Speaker 4: OSHA is accomplishing, in part, was getting the company's attention.

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Speaker 4: By getting the public's attention, the tens of millions of

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Speaker 4: dollars in proposed fines from OSHA is very much a

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Speaker 4: drop in the bucket compared to the company's revenue. OSHA

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Speaker 4: also has this fragmented structure where around half the states

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Speaker 4: have their own mini oshas that are responsible for enforcement,

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Speaker 4: and some of them have not seemed eager to bring

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Speaker 4: any hammer down on this company. In fact, in a

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Speaker 4: number of cases, state labor agencies, even when they cited

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Speaker 4: the company, issued zero dollar fines. We found through our

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Speaker 4: public records requests actual zero dollar invoices that the government

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Speaker 4: sent a Dollar General.

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Speaker 2: And told them to pay zero dollars.

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Speaker 4: Yes, please remit payment promptly in the amount of zero dollars.

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Speaker 2: And how do they explain why they would do that?

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Speaker 4: I was told by the State of North Carolina that

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Speaker 4: a zero dollar citation they used was part of the

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Speaker 4: justification for a larger penalty. A few years later, when

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Speaker 4: a similar issue cropped up, the State of Tennessee told

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Speaker 4: me that, in their view, the amount of penalty for

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Speaker 4: a company doesn't play a role in identifying and correcting

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Speaker 4: workplace hazards.

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Speaker 2: And also, you write that some towns have now tried

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Speaker 2: to block Dollar Generals from opening near them. Why has

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Speaker 2: there been this kind of resistance?

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Speaker 4: That's right. We write about the towns and cities around

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Speaker 4: the country that have either rejected expansion efforts or have

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Speaker 4: put in place policies that restrict the construction of more

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Speaker 4: Dollar stores, for example, by saying you can't build one

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Speaker 4: within one mile or within two miles of existing ones.

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Speaker 4: In talking to people in those cities and towns around

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Speaker 4: the country, one of the themes that's come up is

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Speaker 4: the clutter in the existing stores. Another is the lack

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Speaker 4: of fresh produce options. Fresh produce is not a particularly

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Speaker 4: profitable product, and it's not the main thing that Dollar

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Speaker 4: General is offering.

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Speaker 2: Brendan, As you continue to keep an eye on Dollar General,

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Speaker 2: what are you watching for in the future.

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Speaker 3: Thinking about Dollar General's future, I'd say there's a few

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Speaker 3: different things to watch. One of them is local opposition

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Speaker 3: to the company's growth. Planet of course, the expansion has

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Speaker 3: been so central to the company's financial success over the

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Speaker 3: last fifteen years. In recent years, though, you've had about

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Speaker 3: seventy five communities around the US that have opposed dollar

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Speaker 3: stores in one form or another. Long story short, you know,

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Speaker 3: if opposition to dollar stores becomes a lot more common

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Speaker 3: around the country, that would certainly have an effect. And

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Speaker 3: of course that's just one consideration. If you're thinking about

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Speaker 3: Dollar General's future, especially from investors standpoint or an employee standpoint.

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Speaker 3: The other things you've got rising costs, you've got increased

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Speaker 3: competition from companies like Dollar Tree and Walmart that are

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Speaker 3: also going after the same kind of lower income customers.

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Speaker 3: And then you've got just the consumer backdrop where there's

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Speaker 3: more and more pressure on shoppers, Lots of price increases

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Speaker 3: in the last couple of years, rising borrowing costs now

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Speaker 3: just a lot of things that are eating away at

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Speaker 3: people's purchasing power.

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Speaker 2: Brandon Josh, thanks for coming on the show.

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Speaker 4: Thanks a lot, Thank you, Thanks.

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Speaker 2: For listening to us here at The Big Take. It's

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