Monday, January 18, 2021

Dollar Store Bargains Are Proof: All That Glitters Ain’t Gold!

November 9, 2020 by  
Filed under Business, Money, News, Opinion, Weekly Columns

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( Dollar Stores are common throughout the world. They were first introduced and gained popularity in the United States. Today, they can be even found in countries that are in competition against the mighty dollar. That’s just how popular the dollar stores have become. They are known under different titles including $1 Shop, $1 Dollar Only, Dollar Shop and Dollar Tree in the Midwest. The idea behind the dollar store is that all items are being sold at the runaway discounted price of $1.00… How is this possible?

Well, according to the shop owners and organizations running these stores, it is possible only because they can find great discounts for their products. These bargain deals are then passed onto the buyers. The result is that we (the consumer) can buy some great and some not so great products at throwaway prices.

However, as a teacher of Consumer Education, from the elementary to graduate school level, this writer wants you to know there’s a lot that goes on in these significantly discounted stores. What if I tell you that some products that you buy at these stores are not even worth $1.00 at all or that some could even be detrimental to your health? Well, more on that later. Let’s first discuss the reasons that make these dollar stores at least seem to be an excellent value for the money. After all, they continue to exist, which means that they are able to turn profits. Profits indicate consumer trust and a successful business model…right? Not necessarily; as we shall discuss later.

dollar stores 2020

Biggest Dollar Stores?

Currently, Dollar General is the largest chain with 16,278 stores in the United States. It is closely followed by Dollar Tree, which operates more than 15,115 stores in the USA and Canada. Both organizations have an existence on the Fortune 500 list, a testament to their successful business strategy. In 2020, Dollar General ranked 112th, while Dollar Tree is ranked 131st on Fortunes list. Most dollar stores are concentrated in rural and suburban areas.

Dollar Stores – A Blessing?

Now, let’s focus on the pros of dollar stores. Today, dollar stores are not just about toys, makeup, electronics and household products. They also profess a line of food and other edibles. You might be wondering what the pros here are. At times, you can buy products from well-established brands at throwaway prices. At Walmart and other stores, you might be paying $5, or even $15 for it. Here, you can get it for just $1.00. You may or may not be getting the best quality; however you look at it; if there were blatant quality control problems, the Dollar Store phenomenon wouldn’t be operating so consistently in the black.

Apart from food, the dollar stores offer a lot of other everyday items. These essentials, clothing included, are a drain on financial resources of the average consumer. Not everyone has the luxury to spend a significant chunk of their earnings on such items. With the Coronavirus pandemic in full swing, many have lost their source of income. The situation is even worse in already poor and disadvantaged urban neighborhoods. In such situations, these dollar stores are more than a blessing. They offer cheaper alternatives at a price that people have come to rely on and expect.

Another thing to love about the dollar stores is the experience. While moving from aisle to aisle, there’s no telling what you might encounter. This treasure hunt feeling cannot be found in megastores. So, if you are looking to enjoy your shopping experience, dollar stores offer a great opportunity. The feeling of not knowing what deal you are about to come across is something that most would welcome. Big Box stores like Walgreens have countered this Supply and Demand principle by adding a full line of $1.00 products to equipoise the effects of what Economist call “loss profit items.”

Dollar Store Do’s

Want to know something strange… It turns out you can rely on dollar store pregnancy tests. According to USA Today, pregnancy tests are regulated by the U.S. Food & Drug Administration prior to being placed upon store shelves so if your dollar store has them in stock, you’ll know their authentic. One should be warned that these test must be sold legally! That said, the paper also revealed that brand name options are more sensitive and therefore may produce a speedier response.

Choosing where to purchase a test ultimately comes down to how much you’re willing to spend. It is cheaper to buy a pregnancy test at places like Dollar General, where it can cost as little as $1 and, at the most, $6.95, as of this publication, with the cheapest being the store’s brand. For $6.50, you can pick up a brand-named First Response pregnancy test at Dollar General whereas a two-pack of the same tests at CVS costs over $20, averaging out to be about $10.40 per test. Just thought you’d like to have access to what my daughter routinely refers to as TMI (too much information).

Dollar Store Don’ts

One thing that many people hold against dollar stores is their quality issues. Most items sold inside these shops feel like knockoff versions or seemingly built using the poorest and cheapest materials found on Mother Earth. No doubt it’s a valid argument. Dollar store products, as a rule, do not last very long, no matter how careful you treat them.

In more disadvantaged communities, dollar stores are doing more harm than good. The food and other edible items found there pose serious health hazards. For instance, many products contain high fructose corn syrups (HFCS). HFCS is one of the primary reasons for the obesity problem plaguing minorities in the US and numerous other countries. According to many doctors we have interviewed for this research and separately from obesity, HFCS is a contributing factor to diabetes and heart disease. This fact should not be taken lightly by those with health conditions like Diabetes and Hypertension. In this scenario; the dollar store is not your friend!

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Additionally, most stores selling various food items don’t contain fresh produce. Instead, dollar stores just offer canned and processed food. It is those products that people with health issues should steer clear of.  Another problem with dollar stores is that they stifle competition. With so many dollar stores spread throughout the US, competition in the form of other large stores, find it inconvenient to set up their stores in such locations. This reduces the options available to consumers in those areas, forever condemning them to a line of low-quality products; albeit at a fair price.

It’s not just the food or the competition. Dollar stores are also contributing to income disparities. Stores like Walmart and Target offer employees better income opportunities to its people as compared to dollar stores. With so many dollar stores throughout the US and very few large departmental stores, income disparity, the gulf between poor and good paying jobs, is rising.

Furthermore, dollar stores hurt local businesses. The thing with large organizations is that they have enough resources to set up a store anywhere they like. Besides, dollar shops cost little to run from a business perspective. Small wonder why there are so many dollar stores located within a short distance of each other. This would be financial irresponsibility for any other traditional store chain. By saturating the market and offering all items at discounted rates, smaller stores cannot compete with this type of business model. Hence, smaller stores experience a dent in their profits and ultimately shut down because they are forced to cut back on inventory and eventually they close.

Final Thoughts

It is easy to come across people who support dollar stores and every single item sold inside those shops. They argue that these stores provide a livelihood to thousands of people and millions have the opportunity to buy inexpensive products. Without them, people might not have many alternatives, forcing them to buy higher-priced goods. Ultimately, they end up with fewer or no savings at all. As a teacher of Economics, that’s a tough pill to swallow for me!

Granted, everything they say may actually be right. However, the dark side of these dollar stores cannot be ignored. Some shops, as discussed earlier, sell low-quality products and unhealthy food for consumers with restricted diets. By consuming these food items, people are being exposed to health hazards. Lastly, dollar shops are trapping people into a cycle of buying edible food products that are detrimental to their health.

The Dollar Stores themselves are closely clustered together, preventing larger stores from opening; allowing for competition there. They pay less to employees as compared to the larger stores and prevent communities from realizing the benefits associated with their larger counterparts in the form of dollar for dollar competition. Subsequently, many communities with a view to change; have targeted dollar stores through judgements and declarations, including restricting the number of stores that can be opened up in a single area. The premise that all dollar stores are good for the community is a throwback to the old adage: What is good to you is not always what’s good for you!

Staff Writer; Stanley G. Buford

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One Response to “Dollar Store Bargains Are Proof: All That Glitters Ain’t Gold!”
  1. Pelvo White, Jr. says:

    Dollar stores are needed commercial venues that answer the psychological( i.e. sense of pride and human dignity ), physical and pragmatic health ( i.e. healthy foodstuffs to include whole milk and clean water ) and economic disparities that exist in our capitalist economic system that range from the very poor to the very rich. All of these social classes have respectable places to shop in America.Dollar stores abound with name brand products both in the northern and southern states in America.Dollar stores are needed and valued businesses that enable a larger number of our citizens to continue to participate in our capitalist economic system.

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