retail news in context, analysis with attitude

The Bismarck Tribune has a story about how Dollar General,
currently making an aggressive push into North Dakota, is being criticized in some quarters for hurting local businesses, paying employees poorly, draining money from local economies because profits leave town, and contributing little to the communities where it does business.”

According to the Tribune story, critics “say Dollar General can kill small-town downtowns, just like Walmart did in some bigger places. The company denies all those accusations and insists it benefits the communities where it locates because it offers customers more affordable prices for everyday goods. Company officials declined multiple requests for interviews for this story.”

However, the Tribune also suggests that the fears may be greater than the reality, and that in the town of Hankinson - a town of 899 people that is the center of a productive farming region in the southeast corner of the state, an hour south of Fargo - Dollar General hasn’t claimed a lot of victims.

“Local retailers in Hankinson and other towns in the state where Dollar General has opened haven’t suffered significantly, at least not so far,” the story says. “Some stores experienced short-term sales declines because everyone wanted to try the new store, but business has returned and they now say the chain is having minimal impacts on their bottom lines … Downtown has the usual mix of businesses for a town of this size — a bank, a grocery, a drugstore, a hardware store, a couple of bars, insurance dealers, and a funeral home. Customers haven’t abandoned those businesses for Dollar General. No stores have closed. They haven’t had to cut staff. Local retailers are holding their own.”

In part, the story says, “Businesses in towns where the chain has opened say they have chosen to emphasize products that the chain doesn’t stock to differentiate their stores from Dollar General.” A local grocery store “prepared for the arrival of Dollar General by expanding its produce, dairy and frozen food sections, and reducing its inventory of general merchandise, and health and beauty products, which consumers can buy more cheaply at Dollar General … Other retailers say Dollar General can’t compete with them on quality or the depth of their selection in a category. Consumers may go to Dollar General for a cheap package of nails, but if they need a particular-sized screw or a drill, they are more likely to go to the local hardware store.”
KC's View:
Sometimes, there’s fear that a bigger competitor is going to feed you into a wood chipper, and it ends up that smart retailers are able to fight off the threat by doing things differently. I find that heartening.