Unless the master plan is to run competitors out of town and then change to "Two Dollar General", it seems like Dollar General is good for consumers (at least if you judge by consumers' own revealed preferences).
Dollars leaving the community is a good thing. Those dollars don’t just go into a black hole. They go to other towns. And some of those towns’ dollars come to our town.
That allows all of us to diversity our risk across geographic areas. I’d much rather own a small slice of grocery stores in 1000 towns across the country than a large share of the grocery store down the street.
Trickle-down economics failed the U.S. before and will fail us again. Trickle-down economics are a lie sold by the mega-rich.
But as price-sensitive consumers they do benefit from the substantially higher economies of scale, the productivity efficiencies of management best practices, and the lower cost of capital that comes with a professionally managed multinational corporation.
I really don’t think that’s true.
1) That the local business owner will invest back into the community, more than the chain store would have. Sure, some of that revenue will go towards employees, local sales tax, charitable donations, etc., but the same could be said of the chain store. The rest of the profit... what's to stop the local owner from accumulating savings in a national bank, or investing in out of area stocks, crypto, etc.? Unless they were thinking of expanding/franchising their store, their actual investments (as opposed to costs) may or may not be in the local economy vs whatever has the highest ROI.
2) That the local consumers who saved money from the chain store wouldn't simply spend that money at other local businesses. Let's say the chain store saves 1000 customers $10 each, that's $10k of unspent money that could be organically used at other businesses, vs that $10k being funneled into the control of a single small-business owner who might just invest it elsewhere. On average, there's probably a higher chance of 1000 customers spending at least SOME of that money locally than that one local business owner deciding to.
3) Small local businesses typically do not have the economies of scale that benefit pricing and processes, which means they don't have the same margins, which means they might not be able to afford good wages & benefits for their staff, or have to pass on those costs in the form of higher prices for local consumers (who then have less money to spend on other businesses).
4) Most market goods are fungible and UPCed and distributed across the whole country anyway, whereas things like schools and real estate are strictly local/geographical. Money consumers save can be spent on their own immediate family needs, building community by allowing them to afford actual roots instead of just shopping local and supporting that one small business owner.
5) Small businesses tend not to have a very diverse labor force (in terms of skill sets), especially if they're retail. That means the local labor pool has limited employment options beyond low-end service jobs. Especially in a post-COVID employment landscape, large digital-savvy companies probably offer a more realistic pathway out of rural poverty (i.e. people can learn skills, work for remotely for one, but stay local). The small local mom-and-pops can only very rarely offer that to local residents... maybe they contract a local print shop or two, but rarely do they employ full-time marketers, designers, artists, coders, architects, sustainability people, etc.
Basically the whole "buy local" argument seems to stem from the idea that your money is better in the hands of a small business owner than Jeff Bezos's pockets. Maybe that's true in some statistical sense, but it also misses the savings that YOU keep and can spend how you see fit, including investing in your community in actual, non-trivial ways (employment, real estate, schools, local government, marriage, etc.). Buy local might be good for local business owners, but I don't think it's necessarily good for local consumers or local communities. I'd be happy to see data showing otherwise though...
At the end of the day people shop where it's convenient and cheap, with a bit of a tradeoff between those too. Some people like spending more at a locally owned place, but most would rather pocket that extra cash.
In this way, shoplifting is essentially a tax on everyone else in your community.
Dollar General is at the crossroads of a bodega and a grocery store: it’s way better than the bodegas despite not being much more expensive, but it also replaces enough grocery store trips that grocery stores are no longer economically viable.
So he's had to rely upon the two local gas stations, and their meager and overpriced groceries much of the time. DG opened up last year in town, and now he has a much better place to shop. The store also pays better than the gas stations. I think it's a win win.
And can you point to where I can read about DG's "master plan?"
Maybe my area's DGs are atypical, but their selection of food that doesn't fit this description is barely better than a decent gas station's. If your only option is a DG then you may already be in that situation, without their needing to close the store to make it happen.
"A long time ago, there was one store, and prices were high. Then a second store came to town, and prices were low. Eventually, one of the stores closed, so now we have one store again, and prices are high."
At the same time, I'm not convinced we can just assume that to be the case. When a new grocery store in the neighboring town came and put the IGA out of business, my friends were also comparing notes and noticing that the new store paid better than the old one. And offered some things locally where we previously had to drive all the way into the city to get them.
I'm just not convinced these kind of situations can all be neatly fit into a single, straightforward narrative.
I'd say this is to be proven. People that own businesses in broke areas (which is what we're talking about here, no?) are also likely to invest their money in expanding their company in other broke areas, personal financial investments and their children's education.
I live in a relatively rural community where the public schools actually do quite academically when compared across the entire state and we would get families moving into the community because of the excellent care we provide to developmentally disabled kids. Unfortunately the vast majority of people I know that went to college moved out of town and is now generating tax revenue elsewhere.
Dollar objects get replaced much faster than better quality objects.
They’re manipulating that “new purchase” high similar to Facebook juicing us via likes.
Very aptly put. I've been captive to their charm and can verify there is a certain dopamine thrill that quickly vanishes after the subpar goods are brought home and inspected.
These phantom brand dumps invariably smell of cheap plastic dust. That tragic scent fits the gloomy foreboding that such places bring, and should also ward off would-be entrants. It is a literal air of hopelessness. I miss real shops and solid kit.