“Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America." · 3
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- The dollar chains do provide jobs of their own, of course. The chain employs about 121,000 people nationwide and has said it will hire 10,000 more employees this year. But those jobs will be or are mostly low-wage. Salaried managers can earn about $40,000, but they often work long hours without overtime pay. These few positions won’t make much of a dent in the fortunes of communities such as Decatur. The only new employment opportunities in the foreseeable future, other than at the larger Dollar General, are on the grim, hazardous industrial meat lines at Simmons. The company recently announced plans to build an expanded factory 2 miles outside town by 2019 and close part of the existing one. Tharp doesn’t know if the city will lose its water and sewer contract with Simmons and is worried about the potential loss of tax revenue for the schools.
This is a keenly uninsightful look at dollar stores. You only need to visit a couple to understand how safe the bet is: - They open in ex-grocery stores that were too small to be updated when the whole world decided it just wasn't a grocery store without an olive bar - They stock perishables in locations where the refrigeration equipment was left in situ by the bankruptcy probate, but only as cart fillers - They purchase close-out, OEM or nearly-perished dry goods and warehouse them at their locations until they're gone - They do minimal branding, advertising or other outreach and sign short-term leases I mean, Grocery Outlet does the same thing. So, really, does Trader Joe's, it's just that Trader Joe's spends more on branding. The dollar stores don't have to bet on shit - they know that if they can go to a poor neighborhood and sell smaller quantities of lower-quality merchandise, they won't pay much in rent, they won't pay much in salary and they make plenty-good margins. Since they have no capital expenditures to speak of they turn a profit. If you want to see the real story, check out their stock price since 2009. It's not that the dollar stores are betting on a permanent underclass. It's that the investment class is betting on a permanent underclass.
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ButterflyEffect · 734 days ago · link ·
Stock trend since 2009 doesn't seem too different from Walmart, really. Is a shift towards a permanent underclass a cause or symptom of the recession? Did the investment class see the bank bailouts, economic shifts, etc. etc. in 2008 and realize a vast swath of people are screwed, or are they screwed because of the actions of the investment class? Seems like a chicken and the egg scenario. Also, what happens to the people of Decatur, AK the next time the economy does bottom out?
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ORLY. Walmart: up 62%. Dollar General: up 263%. Dollar General has doubled the Dow, while Walmart has underperformed it. For the people of Decatur, the economy never came back. Another plummet is just gonna hit 'em harder.Stock trend since 2009 doesn't seem too different from Walmart, really.
user-inactivated · 733 days ago · link ·
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am_Unition · 733 days ago · link ·
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