Why discount retailers thrive as brick-and-mortar stores crumble
It’s no secret that among certain income brackets and age groups, in-person shopping has steadily declined with the rise of e-commerce. With huge retail giants like Amazon selling everything under the sun, the convenience isn’t something that all Americans can afford. In the current climate of our economy, we see the gap between income classes growing even larger. While the middle class is shrinking, the urban wealthy turn to online shopping and their many brick and mortar stores, the lower class is left with very few places to shop.
The rise of the dollar store
Dollar store chains have thrived in this economy for many reasons. Cost is the first important factor. When the economy isn’t doing well, dollar stores are able to provide the low-cost goods consumers need. They often cut the quantities of items so you can afford to buy smaller amounts instead of paying higher prices for bulk.
Dollar stores are also conveniently located almost anywhere. For rural Americans without a lot of shopping options, dollar store chains have popped up on every corner. According to a statement made to CNN, Dollar General discloses that 75% of its stores are located in towns where the population is under 20,000 people.
The food desert phenomena
In rural and inner-city areas where there’s a lack of big box stores and high-end grocers, people need a convent place to grab household items and food. Many of these areas like the inner city of Chicago are known as food deserts because there’s a lack of grocery stores selling fresh food and produce.
In rural areas, grocery and big box stores are often miles away and inconvenient to get to in a hurry. These are areas where discount dollar stores have thrived. They provide convenient places to shop for people lacking other options.
The sad side of this trend is that dollar stores aren’t able to stock fresh produce and food. Often times the foods purchased here are highly processed. People are also actually spending more money because something that may be sold for less than a dollar online or at another retailer is too far to drive to. People pay more at the dollar store out of pure convenience. Buying in bulk is also a cost saving that lower-income Americans can’t afford. They instead are forced to buy smaller amounts more frequently to keep their weekly grocery bills down.
Rural areas have also seen their local supermarkets crumble because they can’t compete with dollar store prices. Local grocers may be forced to shut their doors when too many dollar store options come to their area.
Online shopping isn’t for everyone
Although there is a growing number of Americans buying everything they can online, there is still a massive amount of the population who isn’t. Many can’t afford to pay membership fees to receive free shipping and they can’t buy enough in one transaction to qualify for the free shipping offered with minimum purchases.
The dollar store chains offer a solution to this problem by selling small items at low prices. There’s no need to pay for shipping or spend a minimum amount for dollar store shoppers.
When being frugal isn’t taboo
Many economists believe we’re headed towards a recession. Saving money and being frugal is always recession proof. For anyone that feels shame about shopping at discount retailers and dollar stores, during a bad economic downturn, that shame goes away. During down times, more people are down together and it becomes more socially acceptable to buy discount and save money. It’s often encouraged and promoted to save money and buy discount during bad economic times. This is another reason discount chains and dollar stores thrive as other brick and mortar stores crumble during a recession.