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Why Some US Cities are Fighting 'Dollar Stores' (eastbaytimes.com)
The Washington Post reports on why some U.S. cities are restricting the spread of discount "dollar stores":
Residents fear the stores deter other business, especially in neighborhoods without grocers or options for healthy food. Dollar stores rarely sell fresh produce or meats, but they undercut grocery stores on prices of everyday items, often pushing them out of business...Grocery stores run on thin profit margins -- usually between 1 and 3 percent. And they employ more workers than dollar stores to keep perishable food stocked.
"It's no longer the big-box grocery store" that threatens local businesses, said David Procter, a Kansas State University professor who studies rural grocery stores. "But it's the discount retailer that's coming to town and setting up shop right across the street."
"As the stores cluster in low-income neighborhoods," the Post writes, "their critics worry they are not just a response to poverty -- but a cause."
"It's no longer the big-box grocery store" that threatens local businesses, said David Procter, a Kansas State University professor who studies rural grocery stores. "But it's the discount retailer that's coming to town and setting up shop right across the street."
"As the stores cluster in low-income neighborhoods," the Post writes, "their critics worry they are not just a response to poverty -- but a cause."
The problem is that the unhealthy crap sold by fast food joints and convenience stores and dollar stores and the like is cheaper (thanks to farm subsidies and other factors that distort the market) than the good healthy stuff.
So the retailers who sell the healthy stuff can't complete with the retailers selling the crap which leads to "food deserts" in these lower-class areas where there just aren't healthy options.
I thought this was America, where people have choice and freedom to choose what they want to eat. If they are choosing unhealthy shit, that's their choice. There will still be some supermarket if there is a demand.
There’s another dynamic at play as well. For some people, buying at the dollar store is a budget issue. They cannot afford to buy things like detergent at a grocery store because, even if it is cheaper on a per unit basis, the $5 spent on it means not enough left over for gas or even food. The dollar store is a better match to their cash flow than a grocery store, even if it a worse long run choice. In other cases, the dollar store is near where they live and the nearest grocery store is miles away, making the dollar store the store of choice.
I'm a consultant - I convert gibberish into cash-flow.
McDonald's sells cheap food. This is the reason why, in America, "fresh food" is expensive.
I'm quite sure that people can cook a home meal for less than a McDonalds meal, especially if you have to drive there. Going to McDonalds is just less effort, and very tasty.
And on the other end of the volume scale, Costco skims off the profitable customers who can and want to buy bulk. Costco also skims off any profitable sector it can simplify and remove from the traditional shop accoutrements around it, like tires. The Costco tire shop only does two things: sell tires and maintain tires. No other repair of any type.
Prices are not actually that great at Costco, but quality is assured. The quality at the dollar store is typically suspect. I remember some outrageous price for a cell phone charger at a Radio Shack. The clerk told me to go next door to the dollar store. It was a hope-for-the-best situation there. The Radio Shack is out of business though.
Both dollar stores and Costco are highly capitalized and can big-foot into new markets. They have that in common against locally owned retail. It's the scale of it that makes people nervous, not anti-capitalist ideology. No one doubts these entities give people what they want at the price/quality they more or less want, given the choices (which the companies help create).
How is this News for Nerds?
Is it because dollar stores sell electronic parts?
Or they have a wide selection of computer games?
They sell the latest laptops?
Or they have really advanced IT?
They compute bitcoin hashes with your body heat when you walk through the door?
Maybe it's me, but there doesn't seem to be any relevance whatsoever.
Put my fist through my alarm clock with its ding-dong death inside my ear. - The Blackjacks.
Even though the story about the boots is fictional, there's a way out of that trap. You have to realize that you only need to buy a single pair of the good leather boots, to solve that particular problem for the rest of your life. After you get your first pair, you slowly save up the $50 for the next pair over the next 10 years. And then with the net money saved, you can get out of other traps.
The reason why people fail is because they cannot hold savings long enough to buy the expensive but durable goods. Instead, they'll spend their savings on something they don't need (as much).
Pratchett wrote comedic fantasy, not economic research. He made things up, including Sam Vimes, the relative costs of boots, and especially their durability.
So Captain Pedantic, never in your life have you experienced cheaply made goods not lasting as long as more expensive goods?
And yes Sam Vines is a work of fiction, but it is a work of fiction used to illustrate a genuine point - That having money increases your options for saving money. For example at some point up the socio-economic tree it becomes financially viable for a person to establish a presence in a tax haven in order to reduce/eliminate a tax burden. (Double Irish with a Dutch sandwich anyone?) Such options are out of the reach of people with lesser means.
I am Slashdot. Are you Slashdot as well?
Even though the story about the boots is fictional, there's a way out of that trap. You have to realize that you only need to buy a single pair of the good leather boots, to solve that particular problem for the rest of your life. After you get your first pair, you slowly save up the $50 for the next pair over the next 10 years. And then with the net money saved, you can get out of other traps.
The reason why people fail is because they cannot hold savings long enough to buy the expensive but durable goods. Instead, they'll spend their savings on something they don't need (as much).
It's even worse today with credit. Now you can buy what you want now, and pay over time for it. What ends up happening for the undisciplined is they buy frivolous stuff on credit, then end up struggling to make the payments WITH INTEREST and that drives their eventual standard of living down. You have less to live on if you have to service that interest on your debt because that big TV you purchased on "sale" now costs you 30 months of interest too, making it cost more than the bigger TV outright. Or that new car costs you more than you can afford for 80 months and when it's 5 years old and you want to trade, you still have 20 months of payments.. But don't worry, they will roll that onto your next car's payment... It's a slippery slope and it take discipline to get off of it, lots of discipline.
But that's really what makes the difference here, discipline and hard work. I've meet very few folks who where poor because they didn't have the ability or opportunity to not be poor. And I've meet some desperately poor people growing up in the back woods of North Carolina. Many where living this way by choice, they didn't want more, or couldn't be bothered to make it happen. It was a social thing for them. One young man who graduated high school with me, 4th in the class, had a dream of moving out of his mother's house so he could get his own address and start collecting his own welfare checks. He was a bright guy, could have gone to college for nearly free and easily pulled himself, and his family out of poverty, but that's not what he chose to do.
Not all poor are there by choice, but unless they are unable to work though no fault of their own, they need not stay in poverty.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
First, I think you should consider that your sample space is pretty skewed. I don't think that you live in poverty, so your exposure to that population is quite low.
Second, the working poor is a surpassingly large segment of the population. Real wages haven’t increased with inflation for years, and while things like TVs and electronics have gone down in price relative to inflation, essential goods haven't.
There's some location dependency as well. Consider a worker in San Francisco that drives a bus or works at contracted janitorial staff. Many of them have to live far outside the city and spend enormous amounts of time commuting. It leaves very little time to do anything that might get them into a better job, and they’re spending every penny they have on rent and survival; many have low or non-existent credit (though that may be a blessing in disguise, because you're not wrong about the dangers of credit or how businesses extending credit are predatory nightmares).
Poverty isn't just a matter of how hard you work. There are a lot of circumstances that go into how it plays out, and once you're poor, the options for getting out become more and more limited. Social mobility is getting lower by the year.
Lastly, there are "frivolous" purchases that poor people make that bring them just a bit of joy or relief, and while it's easy to say that they shouldn't be smoking or eating a bag of chips, life is hard enough without letting yourself just have something small for yourself.
The working poor are just that, and it can be nearly impossible for them to break out of the cycles of poverty once they're in them. Plenty of them are perfectly willing to work to get out of the mess they're in but circumstances don't always allow for it.
Grew up poor, am doing well right now.
My success is due to a few things. Hard work helps. Being in the right field helps. Having a partner helps.
But so does luck. Luck in my gender, my height, even my name all have been shown to increase the chance of financial success in life. Luck in where I was born, and in what state, gave my poor family the ability to have state programs that were pretty good, and a local school that was also pretty damn good. Luck in my family, especially my mother, who didn't sabotage my life or my siblings. Luck I didn't make any irreversible mistakes in my teens and young adult hood that would have nailed me with a felony, huge debt, or a kid to support. Luck in my health, which is pretty good.
When we criticize the poor for being poor, we do two things:
The first is to feel better about ourselves - by believing that poverty is within our control, it shields us from it - we won't become poor because we won't make the wrong mistakes.
The second is that we hold the poor up to a standard that we don't require of the middle class. The middle class makes a slew of financial mistakes to screw over their lives, and we don't hold them accountable for it. Why is it that we require the poor to be saints with their meager incomes, while we don't hold the middle class to the same standard. The middle class is burdened with avoidable debt, consuming a ton of crap, underfunding their retirements, and often without an emergency fund. Yet we don't criticize them for buying things they don't need, even if they are making bad financial decisions. We'll even empathize with the middle class for not having enough money to go around.
But buy something nice for yourself as a poor person, and everyone will judge. Even own something nice as a poor person, and people will make assumptions.
It's a double standard, and an unfair one at that.