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BW Business: You Could Be Paying More For Less At Dollar Stores

Just because a store has "dollar" in its name doesn't mean it's less expensive than the competition.

Thanks to the recession and its long, slow recovery, discount stores are in vogue, and the hottest of the mark down merchants are dollar stores like Family Dollar (FDO), Dollar Tree (DLTR), and Dollar General (DG). Dollar General and Dollar Tree are the two largest dollar stores in the US. Their revenues are exploding, as a result, these stores have seen a surge in sales.  Earnings are off the chart, and stock prices are on the rise. That’s good news for investors. But what about everyday shoppers? Are they really getting their money’s worth when shopping at these discount stores? Don’t let the smooth taste fool ya!

You would think the biggest discounts could be found at dollar stores; it’s right there in the name. If it’s a dollar it must be cheap, and if it’s a dollar it must be a discount. But a discount is more than just the cost of an item — it’s the amount that item is discounted versus the competition. A true discount retailer will make less money on each item it sells than its competitors. And this is where dollar stores start to look a lot more expensive than competitors.

Dollar Tree and other discount chains have been popping up in bulk around the country – especially in cities like Mount Vernon – and making a lot of money in recent years. In fact Dollar Tree – which acquired Family Dollar in 2014, now operates over 14,000 locations across the United States and Canada and earns approximately $20.7 billion a year – has become to number one chain store many urban cities including the city of Mount Vernon. There are almost 2500 dollars stores in Westchester County, alone.

The Family Dollar chain opened up about 1500 new stores between 2010 and 2013 alone at a rate of almost one a day. The three largest dollar-store chains have opened more than 1,800 stores in 2017 alone, giving consumers convenient access to shop on a budget. But some experts warn that dollar-store shoppers looking for a good deal may be getting swindled, according to a July 5th Black Enterprise article title, “Don’t Trust Dollar Stores, You May Be Paying More For Less,”

According to a June 28, 2018 article in The Guardian, “Dollar Stores Are Thriving But Are They Are Ripping Off Poor People,” dollar store patrons often pay more than wealthier consumers who shop in bulk at stores like Costco and Walmart. Here’s how The Guardian breaks down the cost of buying basic goods, like flour and milk, in a dollar store versus a supermarket or big retailer.

The bags of flour at a Dollar Store just south of San Francisco cost only $1, but they also only weigh two pounds. Most bags in the supermarket are five pounds, and can be scored for less than $2.50 at cavernous retailers like Walmart or Costco – though these require time and, often, a car to access.

 Dollar store raisins are only 4.5 ounces. At a big box store, however, 72 ounces of raisins cost $10.50 – meaning dollar store customers are paying 52% more.

 Cartons of milk at a dollar store are only 16 ounces – which prorates to $8 per gallon, more than what you would pay for even top-of-the line milk at Whole Foods.

 Deep-discount retailers have flourished in recent decades, popping up like mushrooms in the depressed locales big-box stores economically eviscerated in the decades before.

However, you can find some great deals at the dollar store — that is, if you shop at a store where everything costs just $1. Despite their names, Dollar General and Family Dollar do not charge a dollar or less for everything. However, Dollar Tree and 99 Cents Only do. But even if you’re paying a buck for some items at these stores, though, you’re paying too much. That’s because there are other stores where you can find them for less.

Here’s where it gets interesting: Walmart may be cheaper on a per-unit basis, but what is also true in every case is that the price tag on each of these items at Dollar General is less than the price tag of the item at Walmart.

Size matters. Sizing products differently is a trick retailers use to obscure the true cost of their products. And from this small sample it appears that your dollar doesn’t go as far at Dollar General, and the retailer makes more money on each dollar you spend.

So be a smarter shopper. Just because a store has “dollar” in its name doesn’t mean it’s less expensive than the competition. In fact, it’s likely that you’re paying more at a dollar store than you would at Walmart or Target for the same item. Keep that in mind next time you are looking for a discount. It may just save you some money.

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About AJ Woodson (2279 Articles)
AJ Woodson is the Editor-In-Chief of Black Westchester and Co-Owner of Urban Soul Media Group, the parent company. AJ is a Father, Brother, Author, Writer, Journalism Fellow, Rapper, Radio Personality, Hip-Hop Historian and A Freelance Journalist whose byline has appeared in several print publications and online sites including The Source, Vibe, the Village Voice, Upscale, Sonicnet.com, Launch.com, Rolling Out Newspaper, Spiritual Minded Magazine and several others.
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