(My Budget 360) Most people have been to a Starbucks and readily admit it, even if they never go back. Many people have been to dollar stores but rarely admit this. Dollar stores are doing exceptionally well with over 8,000 stores in the United States with revenues well above $20 billion a year. Their target audience is working class Americans.
Dollar stores also cater to the massive number of Americans on food stamps. At last count there were 43 million Americans on food stamps. This at a time when the economy is supposedly robust and creating jobs left and right. The reality is that many Americans are now fully left behind by the new economic forces changing the world. The grand rift in our country is stemming from this unrelenting change but one thing is certain. Broke Americans and dollar stores go hand and hand.
The dollar store empire
Since 2008 the number of dollar stores has ballooned by 22 percent increasing to 8,042 (we’ll break it down further when we include Dollar General) when the last measure was taken in 2014. That figure is without a doubt higher today. It is a safe market to invest in given that you have 43 million Americans that receive government assistance each month because they are too poor to get by without it.
The growth in dollar stores is stunning:
Keep in mind that the recession officially ended in 2009. Yet somehow, the trend continues to move higher and higher signaling that many lower income Americans are going to be permanently relegated to a life where they keep their nose in and out of poverty. It is a big struggle. It is now absolutely clear that going to college is no guarantee of a middle class lifestyle. In fact, making a bad turn can actually put you into debt servitude until you enter your grave.
Dollar General is the king of dollar stores. Although they can’t be fully categorized as only a dollar store since they sell more expensive items. However, they do go after the lower income base in America. At last count, they have 13,025 stores across 43 states.
This is in fact a booming market:
“(Dollar General) This morning’s grand opening celebration is one of the planned 900 new stores in 2016 throughout the 43 states Dollar General serves.”
While many other retailers are shutting down stores and cutting back, Dollar General opened up 900 stores in 2016 alone and looks to add many more in 2017. Catering to broke Americans is a booming business and this is where the deep rifts in our society are emerging.
The bigger underlying question here is will this be a temporary lull or is this a permanent restructuring of our economy? From my observations of following the markets for two decades now, this is going to be a permanent remodel of our economy. Millions of Americans are not going to keep up and globalization is becoming increasingly hyper competitive. It is just the nature of how things are. This isn’t some temporary adjustment. We are living in a low wage environment and global competition is always looking for the best deal.
The dollar store business is doing great:
When money is tight, you are going to go bargain shopping. And millions of Americans are broke and realizing that they are not middle class but working class. Dollar stores are the perfect market to cater to this new reality.