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‘Everything Going the Wrong Way’: Dollar Stores Hit a Pandemic Downturn
Their business model is being tested by worker burnout, pressure to raise wages, supply chain
problems and growing local opposition.
The New York Times
By Michael Corkery Sept. 30, 2021
Sandra Beading was fed up with the 70-hour workweeks, the delivery trucks running days behind
schedule, and the wear and tear on her knees from all the stooping to restock the bottom shelves.
The manager of the Dollar General store in Wells, Maine, Ms. Beadling, 54, had tried to hire more
help. But that was a tough sell when Walmart was offering $16 an hour and her store was paying
Ms. Beading had spent long stretches this summer as one of only a few workers in the store,
tending to the register and trying to help shoppers.
She had pleaded with her managers to allow the store’s part-time workers to have more hours, but
to no avail.
One night last month, Ms. Beading closed up the Dollar General at 10, got home at 11:30 and then
left her house at 4 a.m. to be back at the store
for an inventory check. “I was so tired I couldn’t find words,” she said. She sent her assistant
manager a text saying she had quit and then blocked her co-workers’ numbers so they couldn’t call
back and persuade her to stay.
“It wasn’t sustainable,” Ms. Beadling said.
Some wonder whether the same can be said for the unbridled success of dollar stores and their
business model, which has benefited from the
prevalence of poverty and disinvestment in the inner cities and rural America. Dollar stores, which
pay among the lowest wages in the retail
industry and often operate in areas where there is little competition, are stumbling in the later
stages of the pandemic.
Sales are slowing and some measures of profit are shrinking as the industry struggles with a
confluence of challenges. They include burned-out workers, pressure to increase wages, supply
chain problems and a growing number of cities and towns that are rejecting new dollar stores
because, they say, the business model harms their communities.
Just this week, Dollar Tree, which also operates Family Dollar stores, said it would start selling more
products above $1. The move has broad
significance beyond the discount retail industry, analysts say, because it signals that a company
that has built its brand on selling $1 merchandise feels the need to shift its model to account for
higher wages and an unreliable supply line from Asia.
“It means these issues may be permanent,” said Scott Mushkin, a founder and an analyst at R5
Capital, a research and consulting firm focused on retail.
The troubles follow a year of soaring profts and a period of staggering growth in the industry.
Roughly one in every three stores that have been announced to open in the United States this year
is a dollar store, according to Coresight Research, a retail advisory firm, a sign of how well the
industry did in 2020.
The business model, which relies on relative
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