Dollar Store Nation

What the success of the dollar store says about the American economy

In 1868, a new kind of store opened at 669 Broadway in New York City and immediately captured the city’s attention. Immense, staffed with attractive young women, it featured silver-plated cake baskets, heavy-plated tablespoons, silk parasols, solid black walnut hat racks, pearl-handled knives—“pretty much everything,” the New York Sun marveled at the time, and yet whatever one ended up choosing from this great cavalcade of merchandise always cost the same. The enterprise’s name doubled as its universal price tag: It was called The Dollar Store.

Nearly a century and a half later, the novelty of the dollar store, the sense of wonder that attends to how many different ways a few cents worth of raw materials can be processed, packaged, shipped, and sold for a buck, still beguiles us. Earlier this year, the Tennessee-based chain Dollar General exclaimed it has “more retail locations than any retailer in America”—9372 at last count—and is planning to add 625 more in fiscal 2011. Approximately 6700 Family Dollar stores now blanket the U.S., and it’s opening new ones at a pace of more than one a day. Dollar Tree opened its 4,000th store in October 2010 and recorded a 12.4 percent increase in sales throughout the year.

Fifteen years ago, there were fewer than 6000 dollar stores in the U.S. Typically, they’ve been cast as capitalism’s consolation prizes, shabby oases of post-modern barbecue sauce and dangerously overachieving candle sets that have sprung up in the sort of retail deserts where even Walmart won’t take root, and their rise is attributed to economic hardship and the need to stretch every penny like a hot wad of Silly Putty. And no doubt value has always been the cornerstone of these retailers—in 1871, when a dollar price point did not yet automatically signify an extreme discount, a New York Times advertisement for the city’s original Dollar Store boasts that it is “selling goods for at least one-half what they can be purchased for elsewhere.”

But as dollar stores attract more upscale consumers—Time reports that Dollar General’s “fastest-growing customer segment is households making more 
than $70,000”—it also becomes more obvious that consumers shop at these stores not just for utilitarian reasons but also because of how shrewdly they cater to current lifestyles and sensibilities.

In a June 2011 feature for Wired, James Surowiecki writes about how online auctions, widely heralded as the future of retailing just 10 years ago, aren’t even that popular at Ebay anymore. Dynamic pricing was supposed to make consumption more efficient, but we spend time as well as money when we’re shopping, and even in the midst of the recession, time is often the scarcest resource of all. “Why go through an entire auction in order to arrive at nearly the same price you could have set before it started?” Surowiecki writes. In another instance, he quotes Harvard business historian Nancy Koehn: “Does it make sense to spend this much time on an auction when I might not even get the item in the end?”

In Ebay’s millennial heyday, we didn’t yet have social networks to distract us and the full force of Napster had yet to be felt. Shopping was not yet the new reading, the thing we would surely do more of if we could just find time to do it. Indeed, millions of serious shoppers still devoted hours each week to keeping up encyclopedic legacy retailers like Walmart and Costco, marching dutifully through Lawn & Garden, Sporting Goods, and Pharmacy in the same way that once marched dutifully through the sections of the morning newspaper.

Now, when we can barely free up a few seconds to see what sort of deal Groupon is offering on teeth-whitening services, we no longer have the time or the patience for epic seven-day Ebay auctions. Walmart, with its parking lots and aisles 
only a long-distance runner could love, isn’t much better, and that’s one reason its sales have been dropping for seven straight quarters. We want faster, simpler, more convenient shopping experiences. At Dollar Tree, not only are the prices fixed rather than dynamic, they’re downright monolithic. “Everything’s a Dollar!” the signs there exclaim, and unlike at Dollar General and Family Dollar, where 
most of the stock actually goes for prices other than a dollar, this brand promise holds true. That 2.5 liter bottle of soda? It costs a dollar. The multi-purpose lighter with child-resistant safety lock? Also a dollar. Same with the Speed Stick deodorant, the patriotic paper napkins, the nickel-plated party trays. Shopping at Dollar Tree requires less cognitive function than it takes to follow Kim Kardashian’s tweet stream, its stores aren’t big enough to get lost in if you’re not paying full attention—it’s the perfect environment for distracted, time-crunched consumers who no longer approach shopping with the same deeply felt conviction that previous generations of consumers did.

Plus, remember, everything’s a dollar! And who feels like they should have to pay more than a dollar for anything these days? In the age of Groupon and Gilt.com, 50 percent off is the new full retail, the price that suckers pay. Hardcore bargain hunters net 2,000 bucks' worth of groceries for a $100 and a fistful of coupons on a single trip to the store. Lands End unloads new polo shirts for as little as $2 in its monthly Classifieds sales. Pay anything at all for music, movies, or news and millions of folks will judge you a spendthrift or a fool. Dollar Tree caters to this ethos and sets its prices at levels that often verge on the merely symbolic. Even when all it’s selling is a pile of moss, its prices somehow seem impossible: That tiny heap of dead plant matter, in the nondescript packaging, for only a buck? How can they do that?

“It’s all about the thrill of the hunt!” Dollar Tree’s website exclaims, and as long as you avoid flashlights that achieve some of their luminescence through old-fashioned fire, every purchase becomes an engaging science experiment. How long will that $1 tote bag last? Does salad dressing from an obscure salad dressing region known as Riverton Valley taste any different from salad dressing that hails from the world’s best known salad dressing region, the Hidden Valley? As much as they fulfill utilitarian needs, dollar stores simultaneously serve as venues for conspicuously superfluous consumption. They’re thriving at a time when, as The Wall Street Journal recently noted, non-essential purchases comprise a greater share of consumer spending than ever before. Their success arises out of prosperity as well as need, and far from being a consumer’s last resort, they’re growing as fast as they are in part because consumers find them more satisfying to shop at than other retail formats. Pretty soon they may be so ubiquitous someone will undoubtedly propose legislation to keep them from wiping out the giant big-box retailers that have traditionally given America’s suburban sprawl its bland formulaic authenticity.

Contributing Editor Greg Beato writes from San Francisco.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Anonymous||

    Neither Dollar General nor Family Dollar are dollar stores. I guess they don't have them in San Francisco.

  • Greg Cosmos||

    Yeah, it always bothers me when people call them that. I grewup in a town with a Dollar General ( and not much else at the time other than a drug store and independent clothing retailers). They always had things that were priced even at dollars ( like $5,10,15..) but almost nothing was even $1, even back then ( 20+ years ago). Same goes for Family Dollar. They are discount stores, that have bargains, some irregular stuff, and generics.

    When I think of "Dollar Store" I think of stores where everything is a dollar ( or the also popular "99 cent store"). For example, I go to a place called Dollar Tree. Almost everything there is a dollar, and some things are 2 for a dollar or odd prices lower than a dollar ( some 59/69 cent items here and there).

  • Fist of Etiquette||

    Walmart, with its parking lots and aisles only a long-distance runner could love...

    Don a fat suit and grab one of those scooters.

  • Dr. K.||

    Seriously. We're too fucking lazy to waddle our asses from the parking lot to the back of the walmart now?

  • Typical WalMart Customer||

    Well, yeah. Duh!

  • Gibby||

    "How Nazi Scientists Tried to Create an Army of Talking Dogs"--headline, Time.com, May 25

    http://newsfeed.time.com/2011/.....king-dogs/

  • fish||

    Shopping at Dollar Tree requires less cognitive function than it takes to follow Kim Kardashian’s tweet stream...

    I dispute this.

  • ||

    I go to the 99¢ store all the time. But I don't buy anything--I just hold up random items and ask the staff, "How much is this?"

  • Almanian||

    OK, I LOL'ed a little bit

  • Fatty Bolger||

    Reminds me of this.

  • ||

    Thanks, now I've got that silly duck song stuck in my head for the rest of the day.

    Damn you!

  • Tony||

    Another example of the continued coarsening of American culture. Americans would rather save a few bucks so as to have a larger quantity, seemingly thinking that quantity equals happiness.

    In Europe, prices are higher, quantities are smaller and choices are fewer, and they rank higher in every way on every happiness and quality of life scale.

    The poor here are duped into thinking that by being able to afford more crap somehow equals happiness. Too bad they have this choice.

  • Anonymous||

    Too bad they have this choice.

    How progressive of you.

  • ||

    How can you measure something that has no scientific definition? Ah but of course, only Tony knows what's best for American families. Stupidity and arrogance is an ugly combination.

  • Tony||

    That was a spoofer and in no way reflects my opinion.

    I don't believe in lecturing anyone on buying or any other personal habits, because it won't change anything. Much better to look at the macro causes of things if we're interested in them.

  • ||

    *spews old dishwater out of mouth*

  • Tony?||

    I think what you've just said isn't inconsistent with your spoof. The spoof wasn't lecturing people about their choices, but suggesting taking choices away via means such as higher taxation and regulation.

  • Esteban||

    But it seemed like something you would say, which is (sort of) telling.

  • Douglas Fletcher||

    Yeah, well if you weren't such a pussy and put up your real name or attached an email address or website to your alias, we'd know if it was the real dumbshit Tony or not.

  • Old Man With Candy||

    Yes, because no spoofer can spoof the email address or website!

  • Tony||

    You guys no longer get the privilege since a couple insufferable jackasses decided that my having opinions that differed from libertarian boilerplate was reason enough to harass me and invade my privacy (like good freedom lovers).

  • ||

    "In Europe, prices are higher, quantities are smaller and choices are fewer, and they rank higher in every way on every happiness and quality of life scale"

    Let me reword that for you

    In Europe, prices are higher,because socialism levies excessive taxes on people and business, quantities are smaller, because of socialism its harder for businesses to make as much money on a given product so they have to shrink the size but not the price, and choices are fewer, because socialism cannot tolerate anything that doesn't reside within its own special bubble,and they rank higher, so they say according to THEIR surveys, in every way on every happiness, because happiness is totally measurable, and quality of life scale, even though Greece, England, Spain, Portugal, France, Ireland...have all seen massive riots and protests. Yes a veritable garden of eden.

  • ||

    I mean seriously, isn't funny how progressives, and in my mind conservatives are progressives, are now telling us that lessened prosperity and choice is not only normal, its inevitable, hell even desirable, and people FUCKING BUY THIS? I saw ideocracy

  • ||

    once and laughed, now it makes me want to cry because it feels like a prediction.

  • ||

    "and in my mind conservatives are progressives,..."
    are you sure there is room in there, i mean with all the rainbows and unicorns...

  • Joshua||

    I'm going to say this is a Tony spoof.

  • ||

    The poor here are duped into thinking that by being able to afford more crap somehow equals happiness.

    Then why are you living here Tony? I mean, I'm saying 'love it or leave it' but if Europe's your gig than there it is. Europeans there have no problem moving here if they like the USA better.

    And BTW, if you've ever been in a European city with business curfew laws at night...its pretty fucking depressing Tony. Try Brussels ~22:00. May as well be in Billings, MT.

    Oh, but in the Red Light district next to North Station you can get whatever sick shit you want from a transvestite in a booth, because Europeans are too high class for Wal-Mart.

  • ||

    when o when is Walmart, or better yet, Dollar Tree, going to have transvestite in a booth????

    Big Lots did have "transvestites on a stick" but once the lot is gone, they ain't no more...

  • ||

    eBay truly sucks. So much of their stuff is sold at the instant price, and it took them forever to make the discovery that people hate losing an auction because somebody has a robot bidder.

  • SIV||

    WTF? Only low bidders lose ebay auctions.

    I hope I'm missing the context of the above comment.

  • Rock Action ||

    I think I get this. Robot bidders are those who bid low, yet ask the computer to automatically adjust their bids up to a certain amount. So instead of bidding like you would at an auction, in real time, you're bidding against someone's preconceived price floor. For example: There's a an auction with no required floor. Bidder A sees the product, and sets a ten thousand dollar limit, meaning that the computer will automatically counter any bid up until that amount. The auction commences. Bidder B happens by. He sees the auction, it lists a product, and states that the current bid is two thousand dollars. Therefore, eBay conveys to bidder B that the amount of the highest bid stands at two thousand dollars, but that is inaccurate. eBay knows the maximum bid is really ten thousand dollars, it just won't release that information. So you waste your time bidding against a bid that isn't at all representative of person A's real bid. If people were perfectly rational creatures it might mimic a real auction. But people aren't rational and will adjust their floors and ceilings moment by moment. Also, for a deal hunter who uses the listed auction price as a guide to what he or she should bid on, it's an annoying waste of time, plus one suffers the opportunity costs of following the auction with the misrepresented bids.

  • Douglas Fletcher||

    Reminds me of why I avoid ebay.

  • Nutjob Stoner||

    Tony has a robotic blog poster and it has no floor.

  • Nutjob Stoner||

    Hmmm. Are we sure that Reason didn't buy Tony off ebay?

    Think about how many fewer posts there'd be around here without Tony.

    Like, for example, this here post.

  • Patooey||

    "In Europe, prices are higher, quantities are smaller and choices are fewer, and they rank higher in every way on every happiness and quality of life scale."

    Yea. But they are a bunch of damn foreigners so we AmeriKans don't care aboot them.

    But as an aside, less choice is better ?

    Really ?

  • Tony||

    Really.

  • ntnu||

    I've always wondered what the dollar store will do as the dollar keeps inflating.

    I mean, stuff gets cheaper to produce all the time, which means prices will probably deflate as the dollar inflates, but *eventually* the dollar will become as much worth as 10 cent is worth now... What will the dollar store do then? Rebrand itself as the "two dollars store"? The tenner store? The quite-cheap-items store? Inquiring minds wants to know!

  • ntnu||

    >That 2.5 liter bottle of soda?

    I would also like to express my appreciation of the fact that you are using the much superior metric system.

  • Anonymous||

    I don't want a large Farva.

  • NoStar||

    Overheard by a friend of a friend:

    "The best thing about going to the Dollar Store is that you don't have to get all dressed up like you were going to Walmart."

  • Emperor Wears No Clothes||

    Your friend made me laugh.

  • buzzkill||

    Your friend's friend is famous: http://www.flickr.com/photos/billadams/321845104/

  • Greg Cosmos||

    FWIW, I shop at dollar stores, but I don't go there to buy "stuff." I buy household products that I've found work as well or better than similar products that cost 5 times as much.

  • Nutjob Stoner||

    snob.

  • overgraduate||

    But as dollar stores attract more upscale consumers—Time reports that Dollar General’s “fastest-growing customer segment is households making more 
than $70,000”—it also becomes more obvious that consumers shop at these stores not just for utilitarian reasons but also because of how shrewdly they cater to current lifestyles and sensibilities.

    Many Americans place more value on the cost of a product than its quality*. Dollar General could probably attract "more upscale consumers" by simply opening a Two Dollar General selling the exact same crap. It's more likely that higher earners are now shopping at dollar stores because the economic situation has changed their valuation of a product's cost than because of shrewd catering.

    * I'm not judging anyone for valuing a product's cost over its quality. There's nothing wrong with that.

  • NeonCat||

    No mention of the Simpsons parody of Tom Sawyer, where the dollar store has pianos and chandeliers for sale, etc.?

  • RockLibertyWarrior||

    Me at the Dollar Store. "Hey look at these useless colored spatulas in a three pack, one is hot pink! It even melts in your frying pan! A pack of forks that bend when you try to pick up any piece of food that is too heavy! A can of Spaghetti Delight that tastes like a wet sock smells! This all for a dollar?! I am leaving".

  • The Derider||

    Since dollar stores sell predominantly inferior products (In the economic sense of the word), I'd say their proliferation is solid evidence that income has been falling for a significant portion of the US consumer population.

  • Hacha Cha||

    Funny, my local Dollar Tree recently closed down

  • Sahil||

    Thanks ForSharing

  • ||

    While this may be true for many consumers, it seems unfair to mock people who shop at dollar stores. There are items that I buy at dollar stores because their quality actually compares to national brands (and even other store brands), and I don't do this because I'm lazy, I do this because I really try to stretch my check as much as I can. I think this is the same for others. Now, it is more stupid, I think, to buy cheap things just because they're cheap. It's a trap many people can fall into. I would also find it ridiculous to only stick to dollar stores because you're too lazy to walk through a store. I'm a bargain shopper, and this is the first time I see this concept paired with laziness. To me, it's more like working to compare where I can get the best price.

  • Nolatarian||

    "Pretty soon they may be so ubiquitous someone will undoubtedly propose legislation to keep them from wiping out the giant big-box retailers that have traditionally given America’s suburban sprawl its bland formulaic authenticity."

    Yep, it's already in the works in New Orleans.. http://nolatarian.com/Features.php

  • nike running shoes||

    is good

  • قبلة الوداع||

    ThaNk U

  • ugg delaine||

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  • دردشه عراقية||

    Thanks

  • Daily Deals||

    The global recession has hit everyone not just America, cant wait for it to finish

  • SandySmith1||

    I love the dollar store especially for my cleaning supplies. The good thing about the dollar store is that there you can actually find quality products. With what I save buying most of my household cleaning needs at the dollar store, I can enjoy eating in restaurant like this pierogies almost every week.

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