1 00:00:03,279 --> 00:00:07,200 Speaker 1: Welcome to Part Time Genius, the production of iHeartRadio. 2 00:00:11,800 --> 00:00:13,200 Speaker 2: Guess What Will? What's that Mango? 3 00:00:13,640 --> 00:00:15,920 Speaker 1: So, if you're anything like me, you've probably noticed that 4 00:00:15,960 --> 00:00:18,800 Speaker 1: there are a lot of different dollar store chains out there, 5 00:00:18,960 --> 00:00:21,480 Speaker 1: Like pretty much everywhere you look, there's like a Dollar 6 00:00:21,520 --> 00:00:24,919 Speaker 1: Tree or a Dollar General or a Family Dollar. There's 7 00:00:24,960 --> 00:00:27,320 Speaker 1: a five below. I looked as up, there's a ninety 8 00:00:27,400 --> 00:00:30,600 Speaker 1: nine cents only. I mean, it's just dollar stores all 9 00:00:30,640 --> 00:00:31,200 Speaker 1: the way down. 10 00:00:31,360 --> 00:00:34,000 Speaker 2: I feel, you know, I feel like maybe I haven't 11 00:00:34,040 --> 00:00:36,519 Speaker 2: cataloged them quite as extensively as you have. I had 12 00:00:36,520 --> 00:00:38,839 Speaker 2: forgotten this was one of your hobbies, but I will 13 00:00:38,840 --> 00:00:40,440 Speaker 2: acknowledge there are a lot of them. 14 00:00:41,000 --> 00:00:42,840 Speaker 1: So I looked into it this week, and it turns 15 00:00:42,840 --> 00:00:45,440 Speaker 1: out that even though the stores seem the same, each 16 00:00:45,520 --> 00:00:48,560 Speaker 1: brand actually targets a completely different market. 17 00:00:48,680 --> 00:00:50,440 Speaker 2: So what does that mean? Exactly? 18 00:00:50,720 --> 00:00:54,440 Speaker 1: Dollar General a friendly target's older customers in more rural areas, 19 00:00:54,600 --> 00:00:57,520 Speaker 1: so they've intentionally built seventy five percent of their stores 20 00:00:57,560 --> 00:01:00,360 Speaker 1: in small towns with fewer than twenty thousand people. And 21 00:01:00,440 --> 00:01:02,920 Speaker 1: then on the opposite side, you've got things like five Below, 22 00:01:03,160 --> 00:01:05,959 Speaker 1: and it's target demographic as teens and young adults. So 23 00:01:06,240 --> 00:01:08,520 Speaker 1: you actually find those in suburban shopping malls. 24 00:01:08,840 --> 00:01:10,880 Speaker 2: Actually, when you mentioned that the first time, I was 25 00:01:10,920 --> 00:01:12,800 Speaker 2: I didn't remember that, But now that you say that, 26 00:01:12,880 --> 00:01:15,680 Speaker 2: I can picture these being in shopping malls. So what 27 00:01:15,720 --> 00:01:19,160 Speaker 2: about Dollar Tree and what was that you said? Family Dollar? Like, 28 00:01:19,319 --> 00:01:21,319 Speaker 2: I know, I've seen both of those around. Who do 29 00:01:21,360 --> 00:01:21,880 Speaker 2: they target? 30 00:01:22,080 --> 00:01:24,959 Speaker 1: So what's weird is they're actually owned by the same company. 31 00:01:25,160 --> 00:01:28,160 Speaker 1: Dollar Tree bought Family Dollar back in twenty fifteen for 32 00:01:28,560 --> 00:01:31,440 Speaker 1: I believe it's nine billion individual dollars. 33 00:01:31,480 --> 00:01:33,640 Speaker 2: Well, yeah, and a. 34 00:01:33,640 --> 00:01:36,560 Speaker 1: Huge reason for that, bio was because Dollar Tree caters 35 00:01:36,600 --> 00:01:39,880 Speaker 1: to middle income shoppers and Family Dollar goes after the 36 00:01:39,920 --> 00:01:42,640 Speaker 1: lower income ones, and the company wanted both markets. 37 00:01:42,720 --> 00:01:44,880 Speaker 2: Yeah, it's funny, but I feel like we do sort 38 00:01:44,880 --> 00:01:47,960 Speaker 2: of treat these dollar chains interchangeably, like they're just kind 39 00:01:47,960 --> 00:01:50,520 Speaker 2: of there. You really would never guess that behind the 40 00:01:50,560 --> 00:01:53,600 Speaker 2: scenes they were playing this pretty intricate game with each other, 41 00:01:53,640 --> 00:01:55,680 Speaker 2: like carving up the market in the way that they are. 42 00:01:55,920 --> 00:01:58,400 Speaker 1: Yeah, there's actually way more going on with dollar stores 43 00:01:58,400 --> 00:02:00,680 Speaker 1: than people might guess from you know, how they turn 44 00:02:00,720 --> 00:02:04,000 Speaker 1: to profit, whether one dollar steaks are really a good 45 00:02:04,000 --> 00:02:06,040 Speaker 1: deal after all? So why don't we dig in? 46 00:02:24,880 --> 00:02:29,960 Speaker 2: Hey, their podcast listeners welcome to part time genius. I'm 47 00:02:29,960 --> 00:02:32,200 Speaker 2: Will Pearson and as always I'm joined by my good 48 00:02:32,200 --> 00:02:34,400 Speaker 2: friend mangesh Hot ticketter and on the other side of 49 00:02:34,400 --> 00:02:37,640 Speaker 2: that soundproof glass testing out his latest fine from the 50 00:02:37,720 --> 00:02:42,040 Speaker 2: dollar store. That's our friend and producer Loel Burlante. And 51 00:02:42,080 --> 00:02:44,160 Speaker 2: what a fine this was. I mean, hold the box 52 00:02:44,240 --> 00:02:45,639 Speaker 2: up again, Lull, I need to see it just a 53 00:02:45,680 --> 00:02:49,600 Speaker 2: little bit higher. So it's basically a Nettie pot, except 54 00:02:49,639 --> 00:02:52,400 Speaker 2: it's called a Yetti pot for some reason, and on 55 00:02:53,080 --> 00:02:55,119 Speaker 2: the front called it a little bit closer. The front 56 00:02:55,160 --> 00:02:57,760 Speaker 2: of the box shows a couple of what I presume 57 00:02:57,800 --> 00:03:02,080 Speaker 2: are meant to be Yetti's wearying a teapot up its nose. 58 00:03:02,320 --> 00:03:04,440 Speaker 2: It's kind of a weird, weirdge. 59 00:03:04,639 --> 00:03:07,520 Speaker 1: At the time, but I would definitely pay two dollars 60 00:03:07,520 --> 00:03:11,160 Speaker 1: for that, you know, twice twice as much. So I 61 00:03:11,400 --> 00:03:13,200 Speaker 1: definitely want to talk about some of the other strange 62 00:03:13,240 --> 00:03:15,800 Speaker 1: stuff that turns off, you know, at dollar stores. But 63 00:03:16,240 --> 00:03:18,120 Speaker 1: why don't we start by getting a sense for just 64 00:03:18,160 --> 00:03:21,000 Speaker 1: how big a success story dollar stores really are so 65 00:03:21,160 --> 00:03:23,320 Speaker 1: they don't get a ton of respect. But in doing 66 00:03:23,360 --> 00:03:26,480 Speaker 1: the research, Gate basically pointed out that they're kind of 67 00:03:26,480 --> 00:03:28,400 Speaker 1: the unsung Kings of retail. 68 00:03:28,520 --> 00:03:29,840 Speaker 2: Yeah. I don't know if this is true, but it 69 00:03:29,880 --> 00:03:32,480 Speaker 2: feels like there are more dollar stores now than there 70 00:03:32,480 --> 00:03:35,520 Speaker 2: were when we were growing up. It's definitely true. 71 00:03:35,560 --> 00:03:38,000 Speaker 1: So dollar stores have been a fixture of American strip 72 00:03:38,040 --> 00:03:41,080 Speaker 1: mall since the nineteen fifties, but one of their biggest 73 00:03:41,120 --> 00:03:43,480 Speaker 1: booms came during the Great Recession of two thousand and seven, 74 00:03:43,520 --> 00:03:47,400 Speaker 1: and as the economy declined, dollar store sales went way 75 00:03:47,520 --> 00:03:50,000 Speaker 1: way up, and it resulted in this swell of like 76 00:03:50,080 --> 00:03:52,480 Speaker 1: new stores opening up all over the country. But the 77 00:03:52,520 --> 00:03:56,480 Speaker 1: really surprising part is that this popularity hasn't worn off 78 00:03:56,520 --> 00:03:59,440 Speaker 1: like dollar stores just keep on thriving. And in fact, 79 00:03:59,480 --> 00:04:03,160 Speaker 1: between two ten and twenty thirteen, the Family Dollar chain 80 00:04:03,240 --> 00:04:06,920 Speaker 1: opened fifteen hundred new stores, which is more than one 81 00:04:06,960 --> 00:04:08,800 Speaker 1: a day for four years in a row. 82 00:04:08,920 --> 00:04:11,960 Speaker 2: Holy cow. And so I'm guessing insane. Yeah, I'm guessing 83 00:04:11,960 --> 00:04:14,760 Speaker 2: it wasn't just a family Dollar doing this too. Yeah. 84 00:04:14,760 --> 00:04:17,640 Speaker 1: So the other chains like Dollar Tree and Dollar General 85 00:04:17,839 --> 00:04:20,920 Speaker 1: they were expanding too. Twenty thirteen ended up being this 86 00:04:20,960 --> 00:04:24,000 Speaker 1: banner year for dollar stores, and in July of that year, 87 00:04:24,480 --> 00:04:26,839 Speaker 1: so many new locations opened that it averaged out to 88 00:04:26,960 --> 00:04:29,800 Speaker 1: one new store opening every six hours. 89 00:04:29,880 --> 00:04:32,800 Speaker 2: All month long. That's interesting. It does feel like too 90 00:04:32,920 --> 00:04:36,159 Speaker 2: many dollar stores, if we're being honest, So how many nights? 91 00:04:36,960 --> 00:04:39,760 Speaker 2: You disagree strongly? So how many are we up to now? 92 00:04:40,520 --> 00:04:43,000 Speaker 1: So all told, there are more than thirty thousand dollar 93 00:04:43,040 --> 00:04:45,200 Speaker 1: stores in the US right now, and according to Forest, 94 00:04:45,200 --> 00:04:48,920 Speaker 1: that's more locations than the six biggest US retailers put together. 95 00:04:49,040 --> 00:04:49,600 Speaker 2: So that's like. 96 00:04:50,000 --> 00:04:55,359 Speaker 1: Walmart, Walgreens, CBS, Costco, Kroger, and Home Depot that's on 97 00:04:55,400 --> 00:04:58,120 Speaker 1: this list here. So you know, the wildest part is 98 00:04:58,120 --> 00:05:00,560 Speaker 1: that analysts say new dollar stores will keep popping up 99 00:05:00,600 --> 00:05:02,839 Speaker 1: like this for at least another three years before the 100 00:05:02,839 --> 00:05:03,760 Speaker 1: demand levels out. 101 00:05:04,000 --> 00:05:05,719 Speaker 2: You know, I'm guessing a good deal of that success 102 00:05:05,800 --> 00:05:07,840 Speaker 2: is thanks to the strategy you were talking about at 103 00:05:07,839 --> 00:05:09,800 Speaker 2: the beginning of the show, like the way dollar store 104 00:05:09,839 --> 00:05:12,760 Speaker 2: brands tend to divvy up the market between themselves so 105 00:05:12,880 --> 00:05:15,800 Speaker 2: together they've got a lock on really like every person 106 00:05:15,800 --> 00:05:18,240 Speaker 2: who might potentially shop at a dollar store. 107 00:05:18,360 --> 00:05:20,880 Speaker 1: That's right, And dollar stores really do have a much 108 00:05:20,880 --> 00:05:23,680 Speaker 1: more mixed income clientele than you might guess, But that 109 00:05:23,760 --> 00:05:25,520 Speaker 1: comes with some issues as well, Like one of the 110 00:05:25,520 --> 00:05:28,080 Speaker 1: big concerns with having a high number of dollar stores 111 00:05:28,200 --> 00:05:31,360 Speaker 1: is that the companies mostly target struggling communities when opening 112 00:05:31,400 --> 00:05:35,400 Speaker 1: new locations, and as a result, a single small town 113 00:05:35,680 --> 00:05:37,720 Speaker 1: or a city neighborhood can wind up with three or 114 00:05:37,760 --> 00:05:41,920 Speaker 1: four different dollar stores but no actual grocery stores, which 115 00:05:42,160 --> 00:05:44,760 Speaker 1: obviously is an ideal, since most dollar stores don't carry 116 00:05:44,760 --> 00:05:46,599 Speaker 1: fresh fruits or vegetables or meats. 117 00:05:46,640 --> 00:05:49,279 Speaker 2: All right, so dollar stores can and do contribute to 118 00:05:49,320 --> 00:05:52,800 Speaker 2: the problem of what we call food deserts. But you're 119 00:05:52,839 --> 00:05:55,359 Speaker 2: saying that high earners shop at dollar stores too. 120 00:05:55,480 --> 00:05:58,000 Speaker 1: Yeah, and in much larger volume than you might expect. 121 00:05:58,040 --> 00:06:00,599 Speaker 1: So according to this two thousand and six teen report 122 00:06:00,600 --> 00:06:04,440 Speaker 1: from Reuters, twenty nine percent of millennial households earning more 123 00:06:04,480 --> 00:06:06,840 Speaker 1: than one hundred thousand dollars per year say they shop 124 00:06:06,880 --> 00:06:09,520 Speaker 1: at least one of the big three dollar chains. So 125 00:06:09,760 --> 00:06:12,480 Speaker 1: all together, these choppers make up roughly, I guess, twenty 126 00:06:12,520 --> 00:06:14,960 Speaker 1: five percent of the total sales from those three chains. 127 00:06:15,200 --> 00:06:16,480 Speaker 2: And it's pretty. 128 00:06:16,200 --> 00:06:18,400 Speaker 1: Shocking when you think about it, but it also makes 129 00:06:18,440 --> 00:06:20,839 Speaker 1: sense since everyone you know likes a bargain. 130 00:06:21,080 --> 00:06:23,719 Speaker 2: Yeah. Well, well, speaking of bargains, that was something I 131 00:06:23,760 --> 00:06:26,320 Speaker 2: wondered about this week, Like, our dollar store price is 132 00:06:26,520 --> 00:06:29,440 Speaker 2: actually a good deal, So of course we had to 133 00:06:29,480 --> 00:06:32,000 Speaker 2: look into this, and it turns out that no, they're 134 00:06:32,040 --> 00:06:35,359 Speaker 2: really not, or at least not always so. For example, 135 00:06:35,640 --> 00:06:38,719 Speaker 2: dollar stores tend to sell milk in sixteen ounce bottles 136 00:06:38,760 --> 00:06:42,080 Speaker 2: for one dollar each, which does sound like a steal, 137 00:06:42,080 --> 00:06:45,039 Speaker 2: but at that rate, you're actually paying eight dollars for 138 00:06:45,120 --> 00:06:46,280 Speaker 2: a full gallon. 139 00:06:46,279 --> 00:06:50,280 Speaker 1: Which sounds like New York prices. Right, maybe don't shop 140 00:06:50,320 --> 00:06:52,279 Speaker 1: for milk at dollar stores. But what about like the 141 00:06:52,360 --> 00:06:55,160 Speaker 1: non perishable items, that kind of stuff like you wouldn't 142 00:06:55,160 --> 00:06:56,719 Speaker 1: really see the same kind of markup. 143 00:06:56,440 --> 00:06:58,560 Speaker 2: On, right, Well, it depends. I mean, you can end 144 00:06:58,640 --> 00:07:00,640 Speaker 2: up with the same type of despair when you look 145 00:07:00,680 --> 00:07:04,039 Speaker 2: at something like raisins or aluminum foil. Like. The trick 146 00:07:04,080 --> 00:07:07,360 Speaker 2: in all of these cases is to offer familiar products 147 00:07:07,360 --> 00:07:11,400 Speaker 2: in slightly smaller packages, so most shoppers don't spot the 148 00:07:11,440 --> 00:07:14,440 Speaker 2: size differences or do an ounced ounce cost breakdown when 149 00:07:14,480 --> 00:07:17,000 Speaker 2: they're in the aisle. But that said, there are some 150 00:07:17,240 --> 00:07:21,560 Speaker 2: dollar store products that are generally solid deals, like toiletries 151 00:07:21,760 --> 00:07:24,360 Speaker 2: paper goods, for example, and you can buy a roll 152 00:07:24,360 --> 00:07:27,160 Speaker 2: of wrapping paper or a giant tub of cotton swabs 153 00:07:27,200 --> 00:07:29,440 Speaker 2: for half the price that you would at a big 154 00:07:29,480 --> 00:07:31,160 Speaker 2: buck store. So keep that in mind next time you're on. 155 00:07:31,320 --> 00:07:34,320 Speaker 1: I love the idea of buying wrapping paper and just 156 00:07:34,880 --> 00:07:37,000 Speaker 1: you know, putting it around cotton swabs, So I feel same. 157 00:07:37,080 --> 00:07:39,360 Speaker 2: That makes a lot of sense to me. Yeah, well, 158 00:07:39,400 --> 00:07:41,720 Speaker 2: there's another dollar store perk that I learned this week, 159 00:07:41,760 --> 00:07:44,040 Speaker 2: because even though shopping at the dollar store may not 160 00:07:44,160 --> 00:07:46,480 Speaker 2: always give you the most bang for your buck, it 161 00:07:46,640 --> 00:07:49,200 Speaker 2: is a good way to satisfy your shopping craving on 162 00:07:49,280 --> 00:07:52,520 Speaker 2: a budget. So if you're someone who enjoys going shopping, 163 00:07:52,560 --> 00:07:55,400 Speaker 2: then you're probably familiar with the small rush of pleasure 164 00:07:55,440 --> 00:07:58,640 Speaker 2: that comes from just making a purchase, and you can 165 00:07:58,760 --> 00:08:01,960 Speaker 2: actually thank your brain for that. So whenever we anticipate 166 00:08:02,000 --> 00:08:04,840 Speaker 2: a reward, which in this case would be buying something new, 167 00:08:05,200 --> 00:08:08,800 Speaker 2: our brains respond by triggering this kick of dopamine. So 168 00:08:08,880 --> 00:08:12,160 Speaker 2: for an average shopper, the more things you buy, the 169 00:08:12,200 --> 00:08:13,800 Speaker 2: more dopamine levels. 170 00:08:13,600 --> 00:08:16,320 Speaker 1: Rise, which you know, I guess is why some people 171 00:08:16,400 --> 00:08:17,720 Speaker 1: become compulsive shoppers. 172 00:08:17,760 --> 00:08:20,320 Speaker 2: Right, Yeah, that's exactly right. And so that's where dollar 173 00:08:20,360 --> 00:08:23,400 Speaker 2: stores come in because for most people, the pleasure we 174 00:08:23,440 --> 00:08:26,320 Speaker 2: get from shopping doesn't always scale with the amount of 175 00:08:26,400 --> 00:08:30,000 Speaker 2: money we're spending, so instead it's that number of items 176 00:08:30,040 --> 00:08:32,719 Speaker 2: that we might buy. So each one translates into its 177 00:08:32,760 --> 00:08:36,000 Speaker 2: own little kick of dopamine. How the next time you 178 00:08:36,000 --> 00:08:38,559 Speaker 2: feel the urge for a shopping spree, you might want 179 00:08:38,559 --> 00:08:40,560 Speaker 2: ahead to your local dollar store because you can fill 180 00:08:40,559 --> 00:08:43,040 Speaker 2: the basket on the cheap and still walk out feeling 181 00:08:43,240 --> 00:08:45,480 Speaker 2: like a million bucks. I'm sure that's exactly how it 182 00:08:45,480 --> 00:08:47,520 Speaker 2: would play out to all. 183 00:08:47,480 --> 00:08:49,480 Speaker 1: Right, well, now that we've talked a little bit about 184 00:08:49,520 --> 00:08:51,679 Speaker 1: who's shopping at dollar stores, let's look at some of 185 00:08:51,720 --> 00:08:52,880 Speaker 1: the products that they're buying there. 186 00:08:53,080 --> 00:08:54,520 Speaker 2: But first, a quick break. 187 00:09:01,760 --> 00:09:01,840 Speaker 1: And. 188 00:09:08,360 --> 00:09:10,400 Speaker 2: You're listening to part time Genius and we're talking about 189 00:09:10,440 --> 00:09:13,120 Speaker 2: the best and worst deals to be had at the 190 00:09:13,240 --> 00:09:15,719 Speaker 2: dollar store. Now, speaking of which, the time has come 191 00:09:15,760 --> 00:09:18,520 Speaker 2: at last, Mango, we need to talk about the one 192 00:09:18,679 --> 00:09:19,839 Speaker 2: dollar steaks. 193 00:09:20,240 --> 00:09:23,120 Speaker 1: I love, like how offended you were by this, Like 194 00:09:23,120 --> 00:09:25,920 Speaker 1: we were talking about this beforehand. It just feels ridiculous. 195 00:09:26,200 --> 00:09:27,839 Speaker 1: And it's not like someone's actually going to force you 196 00:09:27,880 --> 00:09:28,760 Speaker 1: to eat one of these. 197 00:09:29,679 --> 00:09:32,679 Speaker 2: It's the principle of the thing, Mango. But I feel 198 00:09:32,679 --> 00:09:34,720 Speaker 2: like we should back up a minute because some listeners 199 00:09:34,720 --> 00:09:36,839 Speaker 2: out there might be a wee bit confused by all 200 00:09:36,840 --> 00:09:39,240 Speaker 2: of this talk of a one dollar steak. So we 201 00:09:39,360 --> 00:09:43,160 Speaker 2: mentioned earlier that dollar stores don't usually carry fresh foods, 202 00:09:43,679 --> 00:09:46,360 Speaker 2: but a growing number of them do stock frozen foods 203 00:09:46,400 --> 00:09:49,160 Speaker 2: now And one of the best or worst deals is 204 00:09:49,200 --> 00:09:52,440 Speaker 2: the one dollar ribbi and the Dollar Tree freezer section. 205 00:09:52,960 --> 00:09:55,959 Speaker 2: So these four ounce boneless beef steaks are sold pre 206 00:09:56,080 --> 00:09:59,920 Speaker 2: season in a brine, and they're what's called the utili 207 00:10:00,080 --> 00:10:01,800 Speaker 2: the cut I guess, which are the parts of the 208 00:10:01,840 --> 00:10:05,760 Speaker 2: cow used in institutional kitchens. So the steaks Dollar Tree 209 00:10:05,760 --> 00:10:09,320 Speaker 2: sells are sourced from a company called Stampede Meat Ink. 210 00:10:09,360 --> 00:10:11,240 Speaker 2: I'm really jealous. I wish I had started a company 211 00:10:11,240 --> 00:10:12,320 Speaker 2: called Stampede Meat Ink. 212 00:10:12,840 --> 00:10:14,640 Speaker 1: It's like the worst new It sounds like they sell 213 00:10:14,679 --> 00:10:17,560 Speaker 1: steaks made from cows. I got trampled by bigger cows. 214 00:10:18,920 --> 00:10:22,520 Speaker 2: Well you never know, but if you're feeling adventurous, you 215 00:10:22,520 --> 00:10:24,840 Speaker 2: can buy one of these one dollar stakes for yourself 216 00:10:24,880 --> 00:10:27,880 Speaker 2: at any dollar Tree with a freezer section. And if 217 00:10:27,920 --> 00:10:30,400 Speaker 2: you read the reviews online, a lot of people compare 218 00:10:30,440 --> 00:10:33,480 Speaker 2: the meat to you know, say rubber, or maybe they 219 00:10:33,520 --> 00:10:36,079 Speaker 2: just say it doesn't cook that well. So I'm really curious. 220 00:10:36,120 --> 00:10:39,600 Speaker 1: Now, so did you find anyone who actually liked these 221 00:10:39,600 --> 00:10:40,400 Speaker 1: one dollar sticks? 222 00:10:40,760 --> 00:10:43,920 Speaker 2: I did find one positive review, but even then, the 223 00:10:43,920 --> 00:10:46,880 Speaker 2: woman who actually bought the steak. She didn't like it, 224 00:10:47,600 --> 00:10:50,800 Speaker 2: So why is that? Why is that a positive review? Well, 225 00:10:50,800 --> 00:10:54,680 Speaker 2: because her dog apparently did love it, So to be fair, 226 00:10:54,720 --> 00:10:59,120 Speaker 2: I did come across some surprisingly measured responses from actual humans. So, 227 00:10:59,200 --> 00:11:02,560 Speaker 2: for example, in twowenty sixteen, a TV station in Cincinnati 228 00:11:02,640 --> 00:11:05,959 Speaker 2: held a taste test for local firefighters. So they were 229 00:11:06,000 --> 00:11:09,240 Speaker 2: asked to sample a butcher's cut, a supermarket cut, and 230 00:11:09,320 --> 00:11:12,400 Speaker 2: of course the one dollar ribi. And the reactions were 231 00:11:12,400 --> 00:11:15,480 Speaker 2: mixed among the firefighters you might expect, but some of 232 00:11:15,480 --> 00:11:19,200 Speaker 2: the more positive views were it's not terrible and I 233 00:11:19,280 --> 00:11:22,640 Speaker 2: guess it was meat. I guess interview. 234 00:11:24,960 --> 00:11:27,320 Speaker 1: Okay, so here's another product you probably didn't know you 235 00:11:27,320 --> 00:11:29,120 Speaker 1: could buy at the dollar store, or at least I 236 00:11:29,120 --> 00:11:30,760 Speaker 1: didn't know you could buy it, And that's a home 237 00:11:30,800 --> 00:11:34,640 Speaker 1: pregnancy test kit. But unlike those one dollar ribbis, these 238 00:11:34,640 --> 00:11:37,480 Speaker 1: pregnancy kits are actually worth the money. In fact, the 239 00:11:37,480 --> 00:11:39,920 Speaker 1: ones carried at a lot of I guess the dollar 240 00:11:39,960 --> 00:11:42,920 Speaker 1: tree stores are the same kind used in most hospitals. 241 00:11:43,160 --> 00:11:45,360 Speaker 2: Oh wow, I mean, maybe this is a bit unfair, 242 00:11:45,360 --> 00:11:48,280 Speaker 2: but I'd be so hesitant to trust a one dollar 243 00:11:48,360 --> 00:11:52,440 Speaker 2: pregnancy test. I mean, that feels so cheap for that purpose, Like, 244 00:11:52,480 --> 00:11:54,040 Speaker 2: how could it actually be reliable? 245 00:11:54,200 --> 00:11:56,400 Speaker 1: So I was wondering about this myself, and it turns 246 00:11:56,440 --> 00:11:59,520 Speaker 1: out the tests are actually pretty reliable. And that's because 247 00:11:59,559 --> 00:12:02,800 Speaker 1: most and tests are made to detect just one specific 248 00:12:02,840 --> 00:12:06,160 Speaker 1: hormone that's produced during pregnancy. It's like a simple enough 249 00:12:06,200 --> 00:12:08,720 Speaker 1: task that most kits can pull it off regardless of 250 00:12:08,760 --> 00:12:10,800 Speaker 1: the price. But you know, that's not to say there 251 00:12:10,800 --> 00:12:13,640 Speaker 1: aren't advantages to using a more expensive test. You know, 252 00:12:13,720 --> 00:12:16,280 Speaker 1: they can often detect lower amounts of that same hormone 253 00:12:16,400 --> 00:12:18,800 Speaker 1: earlier in the pregnancy, so you know, a Dollar Store 254 00:12:18,880 --> 00:12:21,000 Speaker 1: kit might not show that the woman is pregnant until 255 00:12:21,000 --> 00:12:22,200 Speaker 1: a little later in the pregnancy. 256 00:12:22,280 --> 00:12:24,640 Speaker 2: I do love how the steak is super shady, but 257 00:12:24,720 --> 00:12:27,719 Speaker 2: like the pregnancy test, we feel like they're so trustworthy. 258 00:12:28,400 --> 00:12:30,120 Speaker 2: I guess it kind of balances each other out. 259 00:12:30,200 --> 00:12:32,080 Speaker 1: Well. What's funny is that, like one of the other 260 00:12:32,360 --> 00:12:35,600 Speaker 1: items that Dollar Tree carries that's supposedly like this hidden 261 00:12:35,640 --> 00:12:39,160 Speaker 1: gem is their ovulation predictor. It actually has one of 262 00:12:39,200 --> 00:12:42,720 Speaker 1: the highest product rankings of all the Dollar Tree items. 263 00:12:42,760 --> 00:12:45,320 Speaker 1: I guess it's got four point six stars, and the 264 00:12:45,320 --> 00:12:47,400 Speaker 1: customer reviews say it works just as well as the 265 00:12:47,400 --> 00:12:48,280 Speaker 1: more expensive brands. 266 00:12:48,440 --> 00:12:49,920 Speaker 2: I feel like we might just have to take their 267 00:12:49,960 --> 00:12:51,880 Speaker 2: word for that, But for now, I thought we could 268 00:12:51,880 --> 00:12:54,840 Speaker 2: switch gears and talk about something I've always wondered about, 269 00:12:54,880 --> 00:12:57,840 Speaker 2: which is how dollar stores actually make money. 270 00:12:57,960 --> 00:12:59,679 Speaker 1: I feel like it's just through something a lot of 271 00:12:59,720 --> 00:13:01,200 Speaker 1: staate and pregnancy cuts. 272 00:13:01,440 --> 00:13:03,559 Speaker 2: That's all there is. I mean, I guess that is true, 273 00:13:03,559 --> 00:13:06,080 Speaker 2: but I meant more like, how do dollar stores turn 274 00:13:06,120 --> 00:13:09,360 Speaker 2: a profit off of these, you know, really inexpensive products. 275 00:13:09,400 --> 00:13:11,400 Speaker 2: But before we get into that, let's take one more 276 00:13:11,480 --> 00:13:28,280 Speaker 2: quick break and welcome back to part time genius. All right, Mango, 277 00:13:28,440 --> 00:13:30,560 Speaker 2: So another thing I was curious about this week is 278 00:13:30,600 --> 00:13:34,240 Speaker 2: how dollar stores managed to turn profits off of you know, 279 00:13:34,240 --> 00:13:37,720 Speaker 2: these really inexpensive items. Because I found some sales figures 280 00:13:37,760 --> 00:13:40,000 Speaker 2: from a few years back, and I was shocked to 281 00:13:40,000 --> 00:13:43,160 Speaker 2: see that Dollar Tree makes thirty five cents of profit 282 00:13:43,559 --> 00:13:46,800 Speaker 2: for each dollar of revenue, compared to twenty four cents 283 00:13:46,800 --> 00:13:49,800 Speaker 2: per dollar that you know, a place like Walmart makes, which. 284 00:13:49,600 --> 00:13:51,840 Speaker 1: Is surprising because you always hear about how well Walmart 285 00:13:51,880 --> 00:13:53,920 Speaker 1: negotiates down prices, you know, just because of all the 286 00:13:54,000 --> 00:13:54,800 Speaker 1: volume they sell. 287 00:13:55,040 --> 00:13:57,040 Speaker 2: Right, So it made me wonder like, is it just 288 00:13:57,080 --> 00:13:59,720 Speaker 2: the high sales volume at a dollar store that helps 289 00:13:59,800 --> 00:14:02,720 Speaker 2: make up for the low prices or is there more 290 00:14:02,760 --> 00:14:05,559 Speaker 2: going on? And what I found is that while volume 291 00:14:05,640 --> 00:14:08,000 Speaker 2: does play a huge part, a lot of what makes 292 00:14:08,040 --> 00:14:11,400 Speaker 2: dollar stores profitable is that they have this no frills 293 00:14:11,440 --> 00:14:14,920 Speaker 2: approach to the shopping experience. For instance, at a big 294 00:14:14,960 --> 00:14:17,760 Speaker 2: box store like a Walmart, you're looking at nearly two 295 00:14:17,920 --> 00:14:21,400 Speaker 2: hundred thousand square feet of shopping space. They're just enormous. 296 00:14:21,440 --> 00:14:24,440 Speaker 2: But I meanwhile, the average Dollar general is just over 297 00:14:24,560 --> 00:14:27,440 Speaker 2: seven thousand square feet. I guess that's a smaller box. 298 00:14:27,520 --> 00:14:30,880 Speaker 2: It's a much smaller boxing. Maybe even if you're not 299 00:14:30,920 --> 00:14:33,240 Speaker 2: good at math, like that is a much smaller boxing. 300 00:14:33,760 --> 00:14:37,440 Speaker 2: Not only does the smaller footprint translate into lower leasing costs, 301 00:14:37,520 --> 00:14:39,480 Speaker 2: it also means that the dollar stores don't need to 302 00:14:39,520 --> 00:14:42,920 Speaker 2: hire as many workers. In fact, a typical dollar store 303 00:14:42,960 --> 00:14:45,640 Speaker 2: staff is made up of just eight or nine people, 304 00:14:46,000 --> 00:14:49,640 Speaker 2: while the average Walmart staff is closer to three hundred people. 305 00:14:50,000 --> 00:14:52,479 Speaker 2: So all of this together helps keep down the overhead 306 00:14:52,520 --> 00:14:55,240 Speaker 2: cost and that, along with the high volume of sales, 307 00:14:55,320 --> 00:14:57,440 Speaker 2: is why dollar stores are some of the most profitable 308 00:14:57,480 --> 00:14:59,560 Speaker 2: stores in the entire retail sector. 309 00:15:00,080 --> 00:15:01,960 Speaker 1: You know, since we're talking about what sets dollar stores 310 00:15:02,000 --> 00:15:04,560 Speaker 1: apart from their larger cousins. I do want to highlight 311 00:15:04,640 --> 00:15:07,200 Speaker 1: what is probably my biggest beef with these, you know, 312 00:15:07,320 --> 00:15:10,120 Speaker 1: quote dollar stores, which is that, you know, somewhere along 313 00:15:10,160 --> 00:15:12,680 Speaker 1: the line, most dollar stores became dollar and up stores, 314 00:15:12,880 --> 00:15:16,120 Speaker 1: like even ninety nine cents only stores now sell products 315 00:15:16,120 --> 00:15:18,320 Speaker 1: for more than ninety nine cents. So now you can 316 00:15:18,360 --> 00:15:20,800 Speaker 1: walk into dollar stores and find items that cost two, 317 00:15:21,000 --> 00:15:22,720 Speaker 1: five and as much as ten dollars. 318 00:15:23,000 --> 00:15:26,120 Speaker 2: Yeah, more like multi dollar stores, I guess, yeah, just 319 00:15:26,160 --> 00:15:30,520 Speaker 2: like regular stores, which feels like borderline false advertising, but 320 00:15:30,840 --> 00:15:33,640 Speaker 2: you know, it's become pretty accepted at this point. So 321 00:15:34,040 --> 00:15:37,240 Speaker 2: none of the big dollar chains still charge just a dollar. 322 00:15:37,440 --> 00:15:40,600 Speaker 1: We actually looked into this, and it seems that I 323 00:15:40,640 --> 00:15:43,080 Speaker 1: guess the one dollar pricing has been Dollar Trees claim 324 00:15:43,120 --> 00:15:45,960 Speaker 1: to fame for their entire existence. For the thirty three 325 00:15:46,040 --> 00:15:48,040 Speaker 1: years it's been in business, the company has always stuck 326 00:15:48,040 --> 00:15:51,960 Speaker 1: to its original policy. And you know that that's despite 327 00:15:52,000 --> 00:15:57,400 Speaker 1: like inflation, despite growing competition, manufacturing costs, whatever, like, despite 328 00:15:57,400 --> 00:15:59,720 Speaker 1: all of that, Dollar Tree execs have kind of stood 329 00:15:59,760 --> 00:16:02,200 Speaker 1: by this one dollar policy for everything in their store. 330 00:16:03,200 --> 00:16:05,280 Speaker 2: I'm guessing there's a butt coming to this. 331 00:16:05,920 --> 00:16:09,200 Speaker 1: Yeah, So the company finally bowed to pressure from some 332 00:16:09,240 --> 00:16:12,280 Speaker 1: of its investors recently, and according to a company statement 333 00:16:12,360 --> 00:16:15,680 Speaker 1: made in March twenty nineteen, Dollar Tree has now begun 334 00:16:15,800 --> 00:16:18,560 Speaker 1: testing additional price points in some of its stores. And 335 00:16:18,920 --> 00:16:21,880 Speaker 1: you know, if the move boosts profits at the test stores, 336 00:16:22,120 --> 00:16:24,440 Speaker 1: like the investors hope it'll do, then chances are will 337 00:16:24,480 --> 00:16:26,920 Speaker 1: likely be seeing you know, dollar plus items in all 338 00:16:26,960 --> 00:16:28,800 Speaker 1: their store shelves before the year's out. 339 00:16:29,160 --> 00:16:31,800 Speaker 2: Yeah, So in other words, stock up on those one 340 00:16:31,880 --> 00:16:33,120 Speaker 2: dollar ribis. 341 00:16:33,200 --> 00:16:35,280 Speaker 1: Right, because you know, they could be three dollars ribis 342 00:16:35,360 --> 00:16:36,640 Speaker 1: or whatever in the. 343 00:16:36,640 --> 00:16:38,960 Speaker 2: Next few years. I mean, it is kind of sad though, 344 00:16:39,000 --> 00:16:41,440 Speaker 2: like these may very well be the final days of 345 00:16:41,480 --> 00:16:44,280 Speaker 2: the last true dollar store if you think about it. Yeah, 346 00:16:44,280 --> 00:16:45,120 Speaker 2: it's the end of an era. 347 00:16:45,240 --> 00:16:47,360 Speaker 1: But if you're looking for something that you can still 348 00:16:47,360 --> 00:16:49,600 Speaker 1: get on the Super Chief, we've got a boatload of 349 00:16:49,640 --> 00:16:52,560 Speaker 1: facts at very reasonable prices. So why don't we do 350 00:16:52,600 --> 00:17:05,200 Speaker 1: the fact off? Okay, so we started the show talking 351 00:17:05,200 --> 00:17:07,879 Speaker 1: about how dollar stores are pretty much everywhere these days, 352 00:17:07,880 --> 00:17:09,679 Speaker 1: and it feels like one is never more than a 353 00:17:09,680 --> 00:17:11,320 Speaker 1: few miles away at any given. 354 00:17:11,119 --> 00:17:13,960 Speaker 2: Time, And it turns out that's actually true. 355 00:17:14,040 --> 00:17:17,520 Speaker 1: So Dollar General has over fifteen thousand stores spread throughout 356 00:17:17,520 --> 00:17:20,320 Speaker 1: forty four states, and according to the company, that means 357 00:17:20,320 --> 00:17:23,520 Speaker 1: seventy five percent of the US population now lives within 358 00:17:23,720 --> 00:17:25,560 Speaker 1: just five miles of one of its stores. 359 00:17:25,680 --> 00:17:27,280 Speaker 2: All right, well, here's a quick one. So when you're 360 00:17:27,320 --> 00:17:29,639 Speaker 2: in the big box stores, you really think of the 361 00:17:30,040 --> 00:17:33,240 Speaker 2: tricks that they use to get people to go for 362 00:17:33,280 --> 00:17:36,159 Speaker 2: the impulse buys or things like that, and actually dollar 363 00:17:36,160 --> 00:17:39,000 Speaker 2: stores use many of the same tricks. So, for example, 364 00:17:39,080 --> 00:17:41,720 Speaker 2: drug stores tend to put food and drinks up front 365 00:17:41,800 --> 00:17:45,119 Speaker 2: to act as these impulse buys, but the actual pharmacies 366 00:17:45,160 --> 00:17:47,639 Speaker 2: are tucked in the very back of the store, and 367 00:17:47,720 --> 00:17:50,919 Speaker 2: dollar stores act under the same principle. So food and 368 00:17:51,040 --> 00:17:53,320 Speaker 2: toys are stocked in the back of the store since 369 00:17:53,320 --> 00:17:56,320 Speaker 2: they tend to be the most popular items, and seasonal 370 00:17:56,320 --> 00:18:00,000 Speaker 2: impulse buys go right up front near the registers. So unfortunately, 371 00:18:00,200 --> 00:18:03,160 Speaker 2: one place where dollar stores do different from larger stores 372 00:18:03,240 --> 00:18:07,200 Speaker 2: is that they typically don't offer employee discounts, so unless 373 00:18:07,200 --> 00:18:10,440 Speaker 2: a product is damaged or open on the shelf, employees 374 00:18:10,520 --> 00:18:13,359 Speaker 2: have to pay the full dollar like everybody else. 375 00:18:13,520 --> 00:18:16,160 Speaker 1: Well, paying full price is always a drag, but if 376 00:18:16,200 --> 00:18:18,439 Speaker 1: you ask some dollar store employees, they'll tell you that 377 00:18:18,520 --> 00:18:20,480 Speaker 1: the worst part of their job is having to deal 378 00:18:20,560 --> 00:18:23,919 Speaker 1: with the dreaded Hot Wheels toy collectors. And that's actually 379 00:18:23,960 --> 00:18:27,520 Speaker 1: not exclusive to dollar stores either, So over zealous hot 380 00:18:27,560 --> 00:18:30,200 Speaker 1: Wheels fans are actually kind of the bane of any 381 00:18:30,280 --> 00:18:31,760 Speaker 1: retail store that stocks them. 382 00:18:31,960 --> 00:18:34,080 Speaker 2: Really, I don't get it. What's so bad about kids 383 00:18:34,080 --> 00:18:35,439 Speaker 2: who collect toy cars? 384 00:18:35,720 --> 00:18:38,200 Speaker 1: So nothing at all. It's actually the adults who collect 385 00:18:38,240 --> 00:18:40,920 Speaker 1: toys that are the problem. And there's a big community 386 00:18:40,920 --> 00:18:43,239 Speaker 1: of adult Hot Wheels fans out there, and they're kind 387 00:18:43,280 --> 00:18:46,159 Speaker 1: of infamous for well, I mean, you can call it 388 00:18:46,200 --> 00:18:49,240 Speaker 1: their dedication. So Metal Flow has had a piece last 389 00:18:49,280 --> 00:18:51,800 Speaker 1: year where they spoke to a Dollar Tree manager named Nate, 390 00:18:52,080 --> 00:18:54,560 Speaker 1: and according to him, these so called hot Wheels hunters 391 00:18:54,600 --> 00:18:57,639 Speaker 1: will quote scour the Internet and find out when stores 392 00:18:57,640 --> 00:19:00,320 Speaker 1: are getting shipments, then show up and demand I go 393 00:19:00,400 --> 00:19:02,280 Speaker 1: to find the one box of hot Wheels out of 394 00:19:02,280 --> 00:19:04,320 Speaker 1: two thousand other boxes so that they can be the 395 00:19:04,359 --> 00:19:05,719 Speaker 1: first to buy them. 396 00:19:06,080 --> 00:19:08,200 Speaker 2: I mean that does sound like a headache for the employees, 397 00:19:08,280 --> 00:19:10,560 Speaker 2: especially if these guys are showing up like every week 398 00:19:10,640 --> 00:19:11,080 Speaker 2: to do this. 399 00:19:11,359 --> 00:19:12,879 Speaker 1: I mean, it's more of a nightmare than that they 400 00:19:13,040 --> 00:19:15,160 Speaker 1: ferently show up every day in a lot of cases, 401 00:19:15,359 --> 00:19:18,200 Speaker 1: and so the collectors who go to local stores every 402 00:19:18,200 --> 00:19:21,320 Speaker 1: morning when it opens are actually have a name, and 403 00:19:21,760 --> 00:19:23,720 Speaker 1: they go by the name door Warmers. 404 00:19:23,840 --> 00:19:25,880 Speaker 2: All right. Well, still, that fact is a nice reminder 405 00:19:25,880 --> 00:19:29,040 Speaker 2: that dollar stores do indeed stock and brand name products 406 00:19:29,080 --> 00:19:31,639 Speaker 2: like hot wheels. But one thing you might not know 407 00:19:31,720 --> 00:19:34,080 Speaker 2: is that some dollar stores even have their own in 408 00:19:34,280 --> 00:19:37,560 Speaker 2: house or private label brands. And we usually think of 409 00:19:37,600 --> 00:19:41,280 Speaker 2: these with the big box stores. But the most successful 410 00:19:41,320 --> 00:19:45,160 Speaker 2: example is probably Dollar General's line of healthcare products, which 411 00:19:45,200 --> 00:19:48,280 Speaker 2: the company sells under the brand name rex Al. So 412 00:19:48,320 --> 00:19:50,879 Speaker 2: it's a strategy that's paid off for Dollar General too, 413 00:19:51,000 --> 00:19:53,400 Speaker 2: like the Rexall brand now accounts for more than two 414 00:19:53,520 --> 00:19:57,080 Speaker 2: hundred million dollars of the company's annual sales. 415 00:19:57,400 --> 00:19:59,320 Speaker 1: Here's the weird one I found. So the founder of 416 00:19:59,320 --> 00:20:01,920 Speaker 1: Walmart and one of the founders of Dollar Tree both 417 00:20:01,960 --> 00:20:04,400 Speaker 1: got their start in business by running the same kind 418 00:20:04,400 --> 00:20:07,720 Speaker 1: of chain store. These were called Ben Franklin stores, and 419 00:20:07,760 --> 00:20:10,359 Speaker 1: some of the franchise stores are actually still around today. 420 00:20:10,720 --> 00:20:12,560 Speaker 1: You can think of them kind of as the prototype 421 00:20:12,560 --> 00:20:14,600 Speaker 1: to dollar stores. They had lots of different items like 422 00:20:14,600 --> 00:20:17,840 Speaker 1: a general store, but sold at discount prices, and these 423 00:20:17,920 --> 00:20:20,280 Speaker 1: dollar end up Ben Franklin stores turned out to be 424 00:20:20,280 --> 00:20:22,720 Speaker 1: a great way for both Sam Walton and k. R. 425 00:20:22,840 --> 00:20:25,720 Speaker 1: Perry to learn the ropes of retail, and after cutting 426 00:20:25,720 --> 00:20:28,359 Speaker 1: their teeth as franchise owners, both men soon went on 427 00:20:28,400 --> 00:20:30,400 Speaker 1: to establish successful chain stores of their own. 428 00:20:30,480 --> 00:20:33,200 Speaker 2: So the guys behind the most successful big box chain 429 00:20:33,400 --> 00:20:36,439 Speaker 2: and the most successful dollar store chain both started in 430 00:20:36,520 --> 00:20:39,320 Speaker 2: the same place. That's pretty wild. Yeah, that is a 431 00:20:39,359 --> 00:20:42,240 Speaker 2: weird coincidence. So I think you deserve the trophy this week, 432 00:20:42,280 --> 00:20:45,280 Speaker 2: which I've subbed out for a one dollar ribi Mango, 433 00:20:45,400 --> 00:20:48,600 Speaker 2: just to bring it home nicely done. 434 00:20:49,080 --> 00:20:50,919 Speaker 1: I don't know if that feels like a victory exactly, 435 00:20:51,000 --> 00:20:51,960 Speaker 1: having to take his own. 436 00:20:52,160 --> 00:20:53,879 Speaker 2: No, it's a victory. Well, if you don't want it, 437 00:20:53,920 --> 00:20:56,199 Speaker 2: low ead it, I'm sure sure. All right, Well that's 438 00:20:56,240 --> 00:20:59,280 Speaker 2: going to do it for today's Part Time Genius for myself, Mango, Gabe, 439 00:20:59,280 --> 00:21:01,320 Speaker 2: and loll Thank thanks so much for listening. We'll be 440 00:21:01,359 --> 00:21:18,040 Speaker 2: back soon with another episode. Part Time Genius is a 441 00:21:18,080 --> 00:21:21,600 Speaker 2: production of iHeartRadio. For more podcasts from iHeartRadio, visit the 442 00:21:21,640 --> 00:21:24,600 Speaker 2: iHeartRadio app, Apple Podcasts, or wherever you listen to your 443 00:21:24,640 --> 00:21:25,240 Speaker 2: favorite show.