Sorry—-what? Isn’t that one of the fundamental basic jobs to be done and expectations of a retailer? You put physical things on display for sale, you mark prices on them, and you sell them. When the prices change, you send one of your employees to the appropriate shelves and you change the tag.
When on earth did we get into a world where that absolutely fundamental most basic task is now too burdensome to do with accuracy?
While I wish that that were how things worked, unfortunately, the US legal system disagrees [0].
[0]: https://en.wikipedia.org/wiki/Invitation_to_treat#Case_law
And they can. Just bring it up to the cashier or managers attention, and voila, they adjust the price. Please let me know if you have had a different experience.
Dollar General stores often run with one overworked staff member doing everything in the store, from stocking to working the register (which is why the register is unstaffed so much and you have roam the store to find someone to ring you up…)
It’s the same BS when Meta and others say they can’t moderate posts because there’s too many.
It makes sense they’re all switching to e-ink tags though, probably saves a ton in labor and the occasional mistake.
That's also why messing with price stickers is a crime.
There's another kind of store that's in a similar situation: thrift stores and nearly all of them have also decided this problem is too hard. Lots of items are marked with just colors based roughly around their estimated value and the store changes the price/color mapping occasionally.
It always has been this way since barcoded stock keeping units because of the problems identified by CAP Theorem [0]. Since the price data of an object must exist in two locations, shelf and checkout, the data is partitioned. It is also relatively expensive to update the shelf price since it depends on physical changes made by an unreliable human. Even if all stores used electronic price tags there will a very small lag, or a period in which prices are unavailable (or a period of unavailability like an overnight closure).
It would be interesting to understand at what point of shelf/checkout accuracy would lead to what increases in overall prices [1]. That is to say that pricing information has a cost: a buyer must bring the item to checkout to find out the true cost in the case of authoritative checkout, or the clerk must walk to each shelf in the case of authoritative shelf.
Once upon a time, each item in the store was labeled with a price tag and the clerk typed that tag into a tabulation device in order to calculate tax and total. The advent of the bar code lead to shelf label pricing since the clerk needn't read a price from each item, leading to the CAP Theory problem of today.
I suppose that the future will bring back something similar to individual price tags in the form of individual RFID pricing. This way each individual item on a shelf can be priced in a way that is readable by the buyer and the seller in the same manner.
Of course the chances of this sort of scam happening are probably not that high, but hey, considering the country is rotting more and more, from the top...
Even with paper tags, the store can't get someone to change the price while you're waiting at the cashier for a "manager" to show up?
And no, it's not possible to compete as a startup against Walmart or any other of the corporate giants (and not just in retail, it's valid across industries) - alone because the sheer scale of Walmart allows them to extort insanely cheap pricing out of vendors. Walmart can sell for far cheaper than any mom and pop store can acquire.
Since COVID, Walmart has stopped having immediate fixes of the problem.
Since 2020, I have accumulated about $1200 in free merchandise using the above. Almost always food.
2) They’re in more convenient locations - often on the drive home already - and are smaller so are faster to get in and out of when you’re hurrying to or from work.
3) If you’re _not_ working, they’re probably cheaper to _get to_, especially if you can’t drive, because they’re closer.
I’m not as up in arms about this as some - in some respects this is just a new iteration of the corner store or bodega, which have always been a little more expensive than supermarkets (and often a little disorganized…) - but it is the truth.
While the typical viewpoint is that "poor people" shop there, that's actually somewhat of a misnomer.
Most dollar stores in the US are located in rural locations, and in part because a lot of rural population is also "lower income" they get the appearance of "only the poor shop there". But the part the folks who label the stores as "for the poor" often overlook is the "ruralness" aspect. That dollar store might only be a five to ten minute drive away to grab something, meanwhile the Walmart or Target or other, that likely has the better deal (the 128oz of Tide for 9.99 vs the 8oz of Tide for $1.50) is a forty-five minute drive away one way. So couple 1.5 hours round trip commute, plus fuel costs for that 1.5 hours, and you start to see why folks would more likely shop at the dollar store vs. the store that actually gives them the better deal overall.
That's partly the "magic" of the dollar stores for corporate. They sprout up like weeds in rural areas much like Starbucks sprout up on every corner in cities. And they capture sales largely because by sprouting up like weeds, they are a shorter round-trip drive to grab sometime (esp. to grab those one or two things you forgot last weekend when you /did/ make the 1.5 hour round trip drive to go to the nearest Walmart for the better deals). These store's sales largely come from the 7-11/Starbucks method in the city: convenience.
And couple the above with the fact that in rural USA, there is effectively zero public transportation and very little in the form of uber/cab companies, and so if one does not have a car, one may be stuck shopping at the dollar store 5-10 minutes away even if one knows the stores are gouging.
1. You help your friend wash the dishes and notice their hefty, 5-quart stainless steel pot. You look it up on Amazon and it's like $50.
2. At $store, you see something that looks like that size and style of pot, but for only $10. What a steal! It's even ultralight so it should be easier to load in the dishwasher...
*Several months later*
3. Your pot is all warped to hell, making it difficult to cook evenly. But your friend's pot is probably fine for the next few decades if not longer. (Note: if this were an oven pan the warping would make it dangerous to use.)
4. To add insult to injury, $store got two more of your dollars just because.
I picked the 5-quart pot because I've seen one of these with my own eyes.
In any case, OP would have been better off paying me $38 for nothing but crushing their dream of buying a decent quality $10 frying pan.
Source? What happens if somebody stuck a $1 sticker on a ps5? Does that mean you can walk out paying $1 for it, even if the cashier corrects you? What if it's not something absurd but a plausible good deal, like $50 off?
I wasn't cursing or yelling, just calmly making the points I made above as the employees took a dive bar approach to customer service...
It doesn't surprise me at all that this kind of thing is intentional -- they're banking on you not walking out without the item having carried it to the checkout.
There is no default price.
I'd love to see a citation on that, since I think you're mistaken -- there's plenty of things that are still a dollar, mostly stuff like packages of napkins or plastic cups, cards and other sundries.
(What was extensively covered was that they were no longer a "everything is a dollar" store.)
we don’t complain that the per unit cost at target is higher than at costco
I've been able to find good deals on some things at Dollar Tree. Usually the good deals were a smaller quantity of a normal-quality brand-name item. I mostly avoid the substandard quality items. But even sometimes substandard is OK if, say, you want to make your political demonstration sign on white foamcore (much cheaper than the art supply store, and you don't care if it's smaller, thinner, or outgassing) rather than on an Amazon shipping box.
There was a Family Dollar across from a large public housing project here, where I also went looking for deals, but the shelf prices looked like a convenience store. I didn't find out whether they were fraudulently charging even more at the register like this article describes. (I hope it closed because the residents knew there was an affordable Market Basket a 20-30 minute walk away, over the city line and train tracks, and they were able to get there and find the time for it.)
My wife attended a political protest, and said she noticed signs made from my employer's shipping boxes.
Sometimes the sign-makers are artistically inclined, and may have access to better materials.
The most memorable example was at the political demonstrations (and counter-demonstrations) leading up to the Massachusetts constitutional convention that legalized gay marriage. For the State House one I photographed (learning photojournalism on the side), the anti-gay-marriage people were mostly bused in, including a pair of angry-looking old nuns in black full habit, and handed out the same ugly stock sign. (There's an obvious joke that they couldn't find a graphic designer who was sympathetic to the anti-gay cause.) Separated from them, across a street was a huge counter-protest, with an ocean of all sorts of creative, colorful, and positive handmaid signs, held by generally good-natured and thoughtful looking people.
I'm lucky in that I have a real grocery store nearby to compare to. If you live in a food desert where these big chains have driven out all competition you wouldn't have a choice.
Sometimes it is more about the upfront cost and/or resulting storage space needed, than pure price efficiency.
And we need more local co-op grocery stores like Berkeley Bowl, the Davis Co-op, and ATX Wheatsville.
Sometimes I pay higher unit prices at a dollar store intentionally because they offer smaller package sizes not offered elsewhere and I only need the smaller amount. I could get a much better unit price at another store but would waste the rest of the product.
If I'm going for a multi-day stay somewhere and I don't want to deal with annoying mini bottles of hotel soap, I'll just pop into a Dollar Whatsit for a small bottle of something suitable at my destination.
The problem is, so is material cost and handling effort. Say, a 2 liter bottle of soda compared to 10x 200 mL. Same amount of soda, but more handling required for stocking, inventory management (aka, make sure there is no soda expiring on the shelf) and finally scanning it over the cash register, and more packaging material.
Larger units of anything will always be cheaper than small units.
I lived in a city that’s in North Metro Atlanta (Johns Creek) where the median household income was $160K. There was a Dollar General right by a Publix. People still went in the Dollar General for little things where the small packages that you could buy was feature and not a bug.
We still stop by the dollar store for snacks sometimes because it is convenient just to get things to pack for a flight. It’s especially popular for tourists in Orlando where I live
Well, there’s your problem.
There's been a lot of work put into distilling "free market" into its most radical interpretation, and lots of people just aren't open to bringing much nuance or pragmatism to bear upon it any more. Many lessons learned painfully in late 19th and early 20th century have been forgotten and the counterweight and containment policies that they earned now tend to get ignored or dismantled.
Just look at food recipes American corporations feed to Americans, and their different recipes for Europe that look more like the American recipes circa the 1990s. Everything in America is optimised to the max permissible bad action.
In the EU and UK, shame still motivates better behaviour.
Every single problem the USA has comes down to the fact that shame, in the USA, stopped functioning in the late 1970s.
Hobbes arguments can rationalize any Nash Equilibrium.
Of course this could be offered. But, no one wants to do it because it's a thankless job. And if you're going to do a thankless job, you'd probably rather get paid a lot of money to do it than very little
They can do this because they are operating in other areas with predatory prices, giving them the ability to operate at a loss, and relying on the fact that at least some of those areas are not being challenged by non-predators.
Everybody seems to be playing the game right in this scenario. Interesting to try to come up with a good counter.
Yes, I guess well capitalize companies could offer unrealistically low prices, but on the other hand, any kind of co-op or community driven organization has the benefit of not needing the margins. Dollar store investors are there to make a buck, if their capital isn't getting reasonable returns will ultimately exit the business and move somewhere else.
Cooperatives distribute the losses but it is still a money pit.
Point is, it's easy to screech "predation" or whatever but the problem is that every one of these things has some justification that can be used in the abstract.
It does legitimately cost more to run a store like Dollar General than Walmart so the same can of beans has to cost more on their shelf for the same margin.
How much more, how much is justified? I don't know.
I get why people shop at them in rural places because that's the only shop within 10-20 miles but in cities it makes no sense. Had prices been 20-30% cheaper but in a smaller size it would still be a ripoff but an understandable one, but often times I saw products that were priced just 3-5% below their standard counterparts while giving you maybe 30%-50% of the product.
The main thing keeping the local dollar stores alive is the death of Party City as far as I can tell.
- in rural america, there are dollar stores everywhere that overcharge for small items. people treat them as a necessary evil and begrudgingly shop there.
- in nyc, there are corner bodegas everywhere that overcharge for small items. they are generally seen as beloved neighborhood institutions.
so... what's the difference? corporate owned vs family owned? length of time in community? presence of cute cat at the register?
Quite to the contrary, the locals are sometimes happy to have such overcharged options at hand, for example if they are throwing a party and find out that they are short on vodka+cigs, and it is 1 am and all the regular shops are closed.
Dollar Generals charge you a little bit more because a huge chain has driven out all the competition and you have no choice. The people who work there do not benefit from the extra you pay, and the owners are not members of the community.
Two neighboring dollar stores just went out of business in a town I commute through. The culprit? A new Harp's grocery store a block away.
The only thing keeping it afloat is literally balloons I feel. Walmart doesn’t sell helium inflated ones.
You said it well yourself - “begrudgingly”. With so many options and price points, I don’t have to begrudgingly shop at bodegas. I do it happily if it serves my goal of getting a single can of Coke. If I want to get a whole stack of them, I’d happily get them at Costco. Options are great when you have them.
In my experience, this doesn't really happen with bodegas: they might be overpriced in the "this is a bad deal for milk" sense, but they don't misrepresent their sticker prices to any degree that I've ever experienced.
(But also, I don't think bodegas do categorically overcharge in NYC. I think they're about the same as grocery stores, i.e. there's a large amount of internal variation in pricing because people generally don't want to make multiple bodega pit stops just to save $2.00 on eggs.)
I don't know about the feasibility of government grocery stores, but I'm pretty sure the entire food supply chain would benefit from massively changing to the employee-/customer-/supplier-owned co-op model and get megacorps and private equity out of the normalized deviancy of predatory money extraction for essential goods and services.
"This was the Captain Samuel Vimes 'Boots' theory of socio-economic unfairness."
- Terry Pratchett, Men at Arms
——
Dollar stores, even when they're actually giving you low prices (and not just charging $1 for 1 of something that you could get a 3-pack of for $2 elsewhere), are often selling lower-quality versions of the products they sell—sometimes versions specifically made for them, but without any visible difference in packaging.
Clothes brands do this too.
Clothes at the outlet store aren't the same as clothes at Dillards, what's stocked at a struggling Macy's in a relatively poor area may be different from what's available for the same brand at Macy's in Manhattan, and all that may not be the same as what's in their flagship stores.
Sometimes they make it semi-obvious provided you learn their secret label language (Polo by Ralph Lauren, Chaps by Ralph Lauren, Ralph Lauren Purple Label, and about a half-dozen other major variants, for example). They do this so they can sell shit to unsophisticated consumers at a large mark-up for the name, riding on the reputation and clout of the good versions of what they sell (elsewhere, at even higher prices).
Take energy. I'm not rich but I'm comfortable, my energy is paid for in an efficient way, I can shop around easily for the best rates for my lifestyle and so on. But if I had no money they'll fit a pay-per-use meter, they charge more money to fill that meter, if I can't fill it or forget to then the power goes out - and it's inconvenient to use it.
Years ago now I had a dispute with the water utility. I refused to pay, so, they eventually concluded that fixing their error was too difficult so they just created a new account starting from zero and wrote off all the costs for the disputed period entirely. If I'd been poor, they'd have threatened to cut off the supply (they're only threatening, fortunately it's not actually legal here to cease supplying clean water to poor people like they're not even animals) and sent scary people to demand payment.
Many places were I shop, hardly any products are lined up with the price attached to the shelves, plus the descriptions of some items are confusing due to the multiple names for the same thing.
Time to force stores to mark each item with the price once again.
It's the same bullshit that allows discount prices on Black Friday or during January sales to be completely misleading.
In the UK we are much tougher on this kind of manipulative pricing, but you still find manipulative things, like being unable to find the price-per-100g on discounted items and "clubcard" items, or bulk buys that end up having higher unit costs and yet seem not to be errors.
"When buying groceries—food and non-alcoholic beverages, pet food or supplies, disposable paper or plastic products, soap, household cleaners, laundry products, or light bulbs—you must be charged the lowest displayed price, whether on the sticker, scanner, website, or app.
If the lowest price you saw for an item is $10 or less, and that lowest price is not what you were charged or not what appeared on the in-aisle price scanner, the first item should be FREE. If the lowest price you saw for an item is more than $10, and that lowest price is not what you were charged or not what appeared on the in-aisle price scanner, you should receive $10.00 off the first item."
https://www.mass.gov/info-details/consumer-pricing-accuracy-...
Not to say it's not happening in a Mass based Dollar Stores but you could be walking away with a lot of free stuff and it would be enough of a deterrent to stomp out the practice. I've had it happen at grocery stores usually at their suggesting.
1. Buy the items and sue.
2. Take the items without paying, likely get the police called on you, and defend yourself in criminal and civil court.
Here in Europe, we have consumer protection agencies. Get wronged? Shoot them off an email and they'll take care of it. And overcharging at the cash register? That gets handled by the responsible authorities. Again, call them, tell them what happened and it can get real messy real fast.
I can't say how effective they are at remediating small figure issues, but no company wants to hear from them regardless.
Which is all to say, for some things, the US also has consumer protection and it's great when it works.
[^1]: Apparently only Apple sells unlocked iPhones. iPhones purchased at other retailers carrier-lock themselves at activation. At least on Verizon they're supposed to automatically unlock after 60 days. When that doesn't happen, you get stuck in Verizon's mindless customer support swamp[^2,^3].
[^2]: https://old.reddit.com/r/Bestbuy/comments/17ae8l2/verizon_sa...
[^3]: https://old.reddit.com/r/Bestbuy/comments/1buemp5/why_is_it_...
Edit: Yeah, I did say before the purchase, but I should have said after the purchase when they pay the legally correct price but the store accuses them of shoplifting and tries to detain them. And I know it's often infeasibly hard to pay the legally correct price from a logistical perspective without the cashier's cooperator, especially if you want to pay with a card. It is clearly possible to put at least the right amount of cash on the counter, ask for the change, and attempt to leave if they refuse, but that doesn't guarantee ever getting the change. Anyway, I did list this option as (purely) theoretical and not as actually practical.
Realistically no store is going chase after the customer for that, but that doesn't mean the average shopper is going to risk arrest/banned (for what the store essentially sees as shoplifting) to send a $2 message over the price difference. And all of this assumes your novel legal theory is actually correct.
This is a fundamental misunderstanding of how the legal system works, at least for common law ones. When cops "enforce" the law, like arresting someone or towing a car, they're only allowed to do it because there's some immediate need. In the former case, it's because having a criminal roaming around the streets is a danger to society, and in the latter case because the car is blocking traffic and needs to be removed. In both cases you still need a judge to ruled that the person actually shoplifted or parked illegally. None of these factors apply in a dispute over pricing, and it's not the police's job to strongarm the shopkeeper to accept the lower-marked price. Indeed, in the two examples, there are often cases where no actions are taken at all, for instance issuing a summons instead of arresting someone, or issuing a ticket instead of towing a car.
While doing some research into state retail pricing laws a few years ago, I discovered how tough Massachusetts is, being one of the last holdouts mandating ticketing on all items, and only relenting in exchange for price scanners every so many aisles. Living in Pennsylvania and annoyed by stores tying their best prices to their apps, I fancifully emailed Elizabeth Warren, asking if she'd prod a friend in state government to consider a legislative end run around apps. I had no idea such a law really existed. "First in the nation" I expect. Wonder how long it's been around?
In 2025, Dollar Tree sold Family Dollar to a group of private-equity firms: Brigade Capital Management, Macellum Capital Management and Arkhouse Management Co.
https://corporate.dollartree.com/news-media/press-releases/d...
It’s a business model cosplaying as poverty relief while quietly siphoning money from the people least able to lose it. They already run on a thin-staff, high-volume model. That 23% increase is not a glitch. They know their customers can’t drive across town to complain. They know the regulators won’t scale fines to revenue.
The type of Private Equity that most here are referring to is the type that buys up existing businesses, squeezes as much money as possible out of them, and throws their desecrated corpses in the gutter. These "investors" are a blight on society, this activity should be criminalized, they should be in prison.
But there are a lot of well-meaning investors who do great things for society that also get stuck with the same label.
Is anyone better off if elderly care becomes too expensive to offer at scale?
2: ???
3: "too expensive to offer at scale"
/s?
Again, what's the basis of this? Half the people in this thread seem to take it for granted that PE is somehow "worse" than public companies, but can't seem to articulate why. The only legal difference between public companies and "private equity" is that the former has stricter reporting requirements and can be bought by non-accredited investors. There's nothing about "ostensibly, trying to make a good or provide a service" or whatever.
At least public companies have some diversity in ownership and agenda.
...as opposed to the average public company? An average company might have more "average joe" shareholders (almost by definition, because private equity is typically off limits to non-accredited investors), but outside of meme stocks, there's not enough of them to make a difference. The rest of the shareholders (eg. pension funds, insurance companies, endowments, family offices) can be assumed to behave like ruthless capitalists chasing the highest returns, regardless of whether the company is public or not.
Right but they are seeking the highest returns as equity holders typically, usually through things like stock buybacks.
Private equity firms have much more devious ways of looting the companies, like management fees, acquiring other portfolio companies, and various other tricks.
If you’ve ever seen the Goodfellas scene where they bust out the nightclub, that’s quite literally their business model.
"looting the companies" is non-nonsensical when they also own it. It's like saying a scrap yard is "looting" the cars it bought by taking out the valuable parts to resell or whatever. The rest of the stuff might make sense in the context of the LPs getting screwed over, but not in the context of portfolio companies that they own.
* If a company controlled by PE goes bankrupt, shareholders (PE) likely make a profit * But if a publicly listed company goes bankrupt, shareholders lose their money
In other words, PEs almost never lose money, so they could extract the last bit of a company, even more short sighted than shareholders of a public company
That's not necessarily a bad thing, or sign of anything sinister. If a business is failing, and you buy it for pennies on the dollar, and despite your best efforts it still goes under, so you liquidate it, you can still turn a profit if the price you paid is lower than what you got from liquidating it. That's not bad, because private equity (or anyone else, for that matter) isn't expected to operate as a charity. The only reason they're willing to stump up the cash to buy the business in the first place is the expectation that they'll make money. It's also not bad for the original owners either, because the fact that they hold to PE rather than someone else, or liquidating it, suggests that the PE offered a better deal than either.
>But if a publicly listed company goes bankrupt, shareholders lose their money
Often times yes, but sometimes not, eg. hertz.
Citation needed.
There is a legal requirement for directors of public companies to act in the financial interests of all shareholders. In practice, and according to precedent, this means long term viability of the company, in other words, a sustained profitable business.
There is no such requirement for a private company. In practice (esp. recent history), this means private equity firms acquire successful businesses to "mine them" of their wealth - capitalizing their assets for personal gain, and leaving nothing left.
The question for public companies isn't how many retail vs institutional investors they have, it's whether an investor can make a claim about a breach of fiduciary duty. It's patently false to say that the institutional investors (who yes, do have more sway) aren't interested in the company acting in their financial interests.
Why? Is there some code of conduct for public companies but not private ones?
No but there’s a difference between private companies and PE owned companies. PE model is very different from regular private companies, and it often involves extracting maximum profits at the expense of the company itself.
And as far as public companies go, shareholders will have to say something about the operation of the company if you start intentionally sinking it.
There's a pattern of behavior, to be sure. The primary control on public companies is shareholder scrutiny. Gutting your company for short term gains, is not always popular. The more diverse the shareholder cohort, the less popular it tends to be.
Private companies don't mind it when they can literally start a new company with the assets from the old without the pesky plebian investors.
Ofc you know this.
There's degrees of PE. Some good, fine, and some worse.
Take real estate development. It's probably one of the suckiest businesses to be in. I know 3 developers who have committed suicide because when things go wrong, your entire life collapses (you put up all your assets in order to obtain construction loans). The litigation, brain damage, and risks are enormous. Increasingly, the payoff is awful (due to worsening legislation and NIMBYism and worse market condiditions)
However, private equity in development I think is a good thing. When there are investors willing to put this money at risk, we get much needed construction of housing (see Austin, TX where rents are falling off a cliff due to over building).
Now look at Los Angeles, which new permits are literally almost non-existent because LA is one of the most hostile places for developers. You can't make money in LA, so there's no capital available.
Then you end up with "affordable" housing developers adding the only supply at $600-900k/unit costs vs the market rate developer at $300-600k/unit.
----
On the other hand, "value add" private equity is much more suspicious. It's more cut throat, easier to end up in crony capitalist situations by operating with a "cut expenses, provide less, make big bucks" model. The people in this world are the kind of guys who have never done anything hard with their hands other than gotten a sore thumb from pounding too hard on their keyboards to adjust their excel model ("Mr. The Model is Always Right") too hard all night long.
This is how we end up with old properties who get flipped 4x each being sold with "upside the seller was too stupid to take advantage of" and ending up in situations where tenants get priced out due to private equity seeking infinite growing returns. Oh and by the way, every previous owner did "lipstick on the pig" jobs because why not try to save costs and make your levered IRR 16% instead of 12%? You cannot show that kind of return when you promised 18%... then it'll make it harder to fundraise your next deal!
This isn't to say that "value add" is a dirty business. We certainly need to balance the incentive to modernize and renovate properties. An d developers overbuilding isn't always a good thing.
So its nuanced. I think people need to fairly give credit that there are both good and bad. The capital efficiency is real and produces real world outcomes since there is a strong financial incentive at the end of the door.
But financial incentives sometimes bump up to issues causing harm in real life, which need to be recognized and called out.
If it's not publicly traded, it's super secure from any public accountability.
And while I'm increasingly hostile toward the shareholder model, we do get one transparency breadcrumb from this (gov managed) contrivance: The Earnings Call
Earnings Calls give us worthwhile amounts of internal information that we'd never get otherwise - info that often conflicts with public statements and reports to govs.
Like CapEx expenditures/forecast and the actual reasons that certain segments over/underperform. It's a solid way to catch corporations issuing bald-faced lies (for any press, public, gov that are paying attention).
AT&T PR: Net Neutrality is tanking our infra investment
ATT's EC: CapEx is high and that will continue
Under the existing legal and regulatory model, yes.
But what abusing that model long-term will eventually result in government-level change that effectively bans the existence of such exploits, wide-spread vigilantism, and/or some sort of collapse.
Yes. Productivity typically goes up [1]. Its reputation for job cutting is overblown [2], as is its record on price increases [3]. And historically, it's tended to decrease concentration in the industries it operates in.
Instead, what I think we have is a category error. Berkshire Hathaway runs itself as a private equity shop, and all venture capital is historically and technically private equity [4]. In essence, we brand failed private market strategies as private equity ex post facto.
Moreover, transaction size is negatively correlated with returns, particularly for leveraged buyouts, which tend to also hit a local maximum when–in hindsight–they borrow right before a crash. So the private equity deals we hear about in the press tend to be those blowing up spectacularly.
Finally, we get a lot of false conflation of market failures to private equity per se. Private-equity owned hospitals are bad. But I haven't seen great evidence they're worse than other privately-owned hospitals with similar leverage or scale. The problem is hospitals probably shouldn't be run for profit. Making them publicly traded doesn't improve outcomes; but it's easier to rail against private equity than private ownership.
[1] https://www.hbs.edu/faculty/Pages/item.aspx?num=67233
[2] https://www.jstor.org/stable/43495362
[3] https://centers.tuck.dartmouth.edu/uploads/cpee/files/Is_Pri...
[4] https://en.wikipedia.org/wiki/Early_history_of_private_equit...
Like every other retail business not targeting the top 5%.
And Dollar Tree and Dollar General are both publicly listed companies, not private equity.
Dollar Tree sold Family Dollar for $1B 10 years after buying it for $8.5B, a pretty big loss. Dollar Tree’s market cap is $25B, so a pretty negligible part of the national dollar store business is “private equity”.
I love Costco (I practically grew up at Costco as a kid), but their ICP is not the kind of person who shops at Dollar General or is on SNAP - it's very much targeted at the 50th percentile income bracket and above [0].
And this is why PE has taken over the dollar market segment - because it's a trash business that no one else wants to service over the long term. PE is basically the last resort if a business cannot raise capital from traditional avenues, and leadership and investors want to exit. For y'all graybeards think of "Sam Vimes Boots theory".
Mine Safety Disclosures did a great overview on Costco's operating model a couple years ago [1].
[0] - https://www.businessinsider.com/how-costco-sams-club-shopper...
[1] - https://minesafetydisclosures.com/blog/2018/6/18/costco
I live in a rural area with a Dollar General about a half mile from my neighborhood. For staples, it’s honestly fine. You want a 6 pack and some hot dog buns because you missed it in the Wal-Mart run the other day (15 miles away), it’s great!
You’re not getting fleeced and if you are, the gas savings alone more than make up for it (0.65 per mile per the IRS.)
For folks who depend on the local DG for, idk, clothes and household goods it might be much worse, I don’t shop for those there ever, but on staples it’ll do, especially given the density of stores compared to major chains.
But it'd be awful if my best shopping option was 15mi away.
Responding to a comment about dollar stores preying on the poor with, “that’s why I shop at Costco” is… a choice.
It really is a luxury that a ton of people can't afford.
The Venn diagram between people who shop at dollar stores and people who shop at Costco isn't empty.
This doesn't make any sense. Costco makes a profit on the goods sold as well. They have every incentive to sell you as much stuff as possible. That's why they also engage in the usual retail tactics to increase sales, like having the essentials all the way in the back of the store, and putting the high margin items (electronics and jewelry) in the front. They might practice a more cuddlier form of capitalism than dollar general, but they're still a for profit retail business.
So yes, Costco does make most of its profit by ensuring customers are happy and continue to renew their memberships every year.
This is financially illiterate because you're mixing revenue ("membership fees") with profit ("net operating income"). While it might be tempting to assume that membership fees is pure profit for them, it's not, because people only buy memberships because they're useful for something (ie. shopping at their stores). Therefore you can't strip that out from the other costs associated with operating a chain of warehouses.
I much prefer this to stores that are happy to burn customers, never expecting to see them again.
You think dollar general is making $37.9B (in 2023) of annual revenue from one-off customers? Unless you're operating a tourist trap, or some sort of business that people only need a few times in their lifetimes (eg. real estate agents), most businesses rely on repeat customers.
Seeing people in BMWs at the Aldi parking lot. Strange country.
Americans used to claim this too. It’s invariably false. It just means that the wealthiest people do a better job of concealing, or not advertising, how vast the wealth discrepancy between them and the average person is.
> Seeing people in BMWs at the Aldi parking lot
The least wealthy person on the list at https://en.wikipedia.org/wiki/List_of_Dutch_by_net_worth could afford 10,000 high-end BMWs and still be extremely wealthy, far too wealthy to have any interest in lining up at Aldi’s for a sale.
Does it really? Who says this, and who believes it?
> Does it really? Who says this
(search engine: 22 relevant results in 0.85s.)
we’re here to provide affordable and convenient access to name brands,
DG’s private brands, nutritious foods, household essentials and more.
You'd have to be incredibly naive to interpret that as "poverty relief".
Being able to understand what those results mean is the important part.
Dollar Tree and Dollar General are publicly traded.
So Family Dollar might be the result of PE tactics, but the other two aren't, and Dollar Tree sold Family Dollar because they saw it as under-performing.
It's actually sort of weird Dollar Tree couldn't make it work. I know the dollar stores all have somewhat different businesses, but you'd think that Dollar Tree could have either turned Family Dollar around or knew it was selling a loser (see the market for lemons) to PE.
Being poor is tough. But the low margins are a pretty good indicator that the alternative to shady businesses is simply not having businesses at all.
ROI on payday loans for lenders is typically very high and their main issue is usually regulation that limits the volume they can transact. ROI on dollar stores is very low because the margin is low, costs are high, and inventory turns is relatively low. For example, Dollar General's inventory turns are half Walmart, that means that to continue operating they need to charge higher prices (the margin).
Low margins aren't an indicator of anything. They are a component of financial return in addition to capital. One does not make sense without the other. In high frequency trading, they are making 1/100000th of a percent on a trade, that is a very high return business if you can do this millions of times a day. Similarly, if I run a housebuilder then I need a 20% margin because I am going to be turning over my inventory across multiple years. If you take out industries with intellectual IP and the secular shift in margin due to taxation changes, ROI across industries is relatively stable...because margins don't matter. What is a good indicator of customers exploitation is if ROI is high. For dollar stores, shareholders are getting exploited, not customers (look at DG/DLTR share price, this is with a secular upturn in multiples, if you take out unit growth which is inherently limited the financial performance is non-existent).
Fact is, Dollar General and similar stores provide a real value to people who live in rural areas. Yes, their prices may be higher for some goods, but that is the price you pay for the convenience they provide. People are free to drive another 20mins to a WalMart or another store to save $0.50 for the same can of corn or loaf of bred. And, people who are really on a budget actually scrutinize the register receipts to make sure they are paying the price listed on the shelf. They can immediately bring up the discrepancy to the staff.
I'm sure the US obsession with not putting the actual price (tax included) on the shelf helps a lot with this. I would notice quite quickly if a store would systematically overcharge me in Europe. It'd be much harder in the US where I expect the price on the shelf to not match the price at checkout.
For some reason, left-wing journalists turn into law of one price zealots when confronted with this issue. The reality is that these locations have low-volume and stores everywhere are relatively expensive to run now. For some reason, journalists get angry at the company rather than people who control how much it costs stores to operate. I mean local governments in the US had no problem accepting Dollar General's sales tax from their poor constituents shrug probably more than the corporation is making from the store.
I live in the UK and there is a store like this, Co-Op. The Guardian finds it easier to blame evil foreign corporations because the Co-Op has much higher prices but is a non-profit so the narrative of the evil corporation crumbles.
An alternative would be to force stores with mischarge rates exceeding a specified level to close until they've completed a full audit of all shelf prices in the store but in some areas that could cause significant local hardship.
Let me guess, the mobile app provides discounts…?
- Businesses must communicate clear and accurate prices prior to consumers booking, ordering or purchasing. They must not mislead consumers about their prices.
- There are specific laws about how businesses must display their prices.
- Businesses must display a total price that includes taxes, duties and all unavoidable or pre-selected extra fees.
- If a business charges a surcharge for card payments, weekends or public holidays, it must follow the rules about displaying the surcharge.
- If more than one price is displayed for an item, the business must charge the lowest price, or stop selling the item until the price is corrected.
In practice, if the checkout price is more than listed price, many retailers give the item for free. It doesn’t stop dodgy constantly fluctuating ‘on sale’ pricing…
Is the Australian shopper protected simply by a stronger culture of adherence amongst retailers or is it because regulators inspect more often and take stronger action against failures?
Surely, now that this made the news, there will be an investigation into the fraudulent behavior of Dollar General and Family Dollar.
Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)
JSR_FDED•8h ago
In other words, regulatory capture at its finest, over the backs of the poorest in the country.
estimator7292•7h ago
itsdrewmiller•7h ago
lowbloodsugar•2h ago
raw_anon_1111•1h ago
gessha•6h ago
mindslight•6h ago
burnt-resistor•5h ago
adamsb6•2h ago
rootusrootus•11m ago
terminalshort•3h ago
burnt-resistor•5h ago
To attain change, enough people have to:
1. Correctly identify the source of their misery, because it ain't [insert scapegoats].
2. Find others who agree with them.
3. Make a plan for effective countering of 1.
4. Use intestinal fortitude and endure temporary setbacks to achieve 3. to overcome 1.
5. Prevent 1. from ever happening again structurally, culturally, and through vigilant participation.
The 0th problem is the political operating system is captured by criminals and power has centralized grotesquely in ways that defeat the fundamental function of separation of powers. All elected officials corrupted by lobbyist bribes need to face accountability and have a code of ethics and integrity, because continuing down this path is the road to ruin.
dmurray•2h ago
So intent matters. What would decide an individual case is not the exact characterisation of the laws on the books, but how sympathetic a regulator or a judge is to the supermarket's claim that these things just happen sometimes.
mindslight•2h ago
dmurray•39m ago
joshuaissac•2h ago
Are there any common-law jurisdictions in the world where having products on sale in a supermarket is not generally considered invitation to treat but as an offer to sell?
dotancohen•1h ago
jkaplowitz•1h ago
One reason it works this way is that treating displayed items as an offer to sell would leave it unclear to whom the offer to sell would be made. Clearly each item on display can only be sold to one of the many shoppers who sees it, so they can't all be offered the sale. There are several other reasons too, like different customers being offered different terms of sale based on loyalty program membership, promotions, student or senior discounts, etc.
Here is the Wikipedia summary: https://en.wikipedia.org/wiki/Invitation_to_treat
As the article says, the term in various US jurisdictions may be slightly different, like invitation to bargain, but the basic concept is the same. (I'm ignoring Louisiana entirely, which has a completely different legal tradition not derived from English common law.)
progval•3h ago
thfuran•2h ago
mystraline•3h ago
So, have every agent in the state inspect them. Fine 5k. Immediately inspect again, different goods. Fine another 5k. Keep doing it opening hours.
Treat them like an inspection money piñata until they fix their ways. State gets a big pile of money to do better, and massive fines at 5k a pop for a few weeks punish the company and their bottom line.
amarant•2h ago
sneak•1h ago
j-bos•1h ago
fencepost•34m ago
Could an inspector manage two per day? If you figure the full cost of each inspector is $150,000/year but dedicated ones could do 8 inspections at $5k each per week, there's well over $1 million/year per inspector (assuming not all inspections would be the full fine, there's travel costs per inspector, inspectors would have to spend some office/court time, etc. that would bring it down from the potential maximum of ~$1,800,000 each factoring in vacation and holidays).
Even Republicans could get behind it! "We're reducing the direct budget of the department, but authorizing it to hire additional inspectors in order to bring in additional revenue that can be utilized to bring the budget to or above its current levels." It's a cost reduction measure!
apparent•24m ago