Ralph: I'm going to start with a bold question today.
And that's this.
Are dollar stores truly a bargain.
Or are we being scammed?
My friends.
Let's unpack if.
These stores are really providing value or just exploiting communities.
I think today's episode is one which may surprise you.
And I expect it's one.
You're going to want to share with others.
This is going to be a fun one folks.
Intro: Welcome to the Ask Ralph Podcast, where listening to an experienced financial professional with over 30 years of experience can help you make sense of confusing questions, current headlines, and industry trends about taxes, small business, financial decision making, investment strategies, and even the art of proper budgeting.
Ask Ralph makes the complex simple by sharing his real world knowledge from a Christian perspective with all things financial.
Now here's your host, Ralph Estep, Jr.
Welcome to our wacky Wednesday show.
Well, this is not a wacky topic by any means.
It's certainly an ironic one.
So I felt it fit for our normal Wednesday theme.
I'm so glad you chose to join us.
I just want to thank you for listening and supporting the program.
I'm coming to you this morning from the Estep farm.
It's a bit soggy here today and this beautiful Saggio accounting studio.
So let me take off my galoshes, put on my podcaster hat, put down those overalls and push that adding machine to the side.
And let's get into some financial wisdom from a Christian perspective.
Today we're diving into important yet controversial topic.
That's dollar stores.
At first glance, these stores seemed like a great resource for low income shoppers to stretch their dollars.
With the majority of items, just $1 often these bright, neatly organized stores appear to offer bargains on household necessities.
But if we peel back the veneer.
Are dollar stores, truly helping poor communities.
That's what we're going to analyze on today's show.
We see these dollar stores all over our neighborhoods and I often feel conflicted about them.
I want to believe they offer real value, especially when so many families are struggling financially.
They seem to be dependent on them.
But I've also noticed an alarming trend.
As more dollar stores pop up, other retailers leave, and this is concerning to me.
Are dollar stores crowding out better options.
Are they indeed filling a need as Christians called to advocate for vulnerable populations.
We need to understand if these stores are pathways to prosperity or truly disguise predators, damaging communities.
Well, don't forget to subscribe to the show and join our email list.
You do that at askralphpodcast.com . So you don't miss tomorrow show tomorrow.
I'm going to talk about why do I have to make quarterly tax payments to the IRS?
And sometimes to my state.
This is a common question I get in my practice and we're going to tackle that question tomorrow.
We've also launched an insider's group on Facebook, and I want to encourage each of our listeners to join the group, to continue the conversation from the show.
It's a great place to share ideas for the show, discuss your triumphs, and also talk about your challenges.
I'll have a link to the Facebook group in the show notes.
Well, let's start with today's Bible verse comes from Proverbs chapter 11, verse one.
It says this.
Dishonest scales are an abomination to the Lord.
But an accurate weight is his delight.
As we discuss dollar store stay, let's keep this wisdom in mind and consider if these stores are providing honest value or are they really misleading consumers?
The truth is folks dollar stores are growing at a staggering rate.
They are far outpacing all other retailers.
In recent years, major chains like dollar general and dollar tree have opened thousands of new locations with plans to open thousands more.
In fact, this was an interesting thing I found out there are now more than 30,000 dollar stores in the U S here's a crazy thing.
That's more locations than Starbucks and McDonald's have combined.
So in theory, the concept of a dollar store seems great.
Who wouldn't want to shop where nearly everything is just a buck.
For cash strapped shoppers, this appeals as a way to stretch limited funds.
No doubt, this explains much of these dollar stores astounding growth.
We are in tough economic times.
When households are pinching pennies.
Paying a dollar for an item feels like a real lifeline.
Families have come to rely on these stores to manage week to week and afford basic necessities.
But the question is, are dollar stores truly helping poor communities manage their expenses?
Or is it just a glossy veneer masking, deeper harm?
As communities have come to depend on dollar stores.
Sobering economic data reveals this growing reliance correlates with indicators of financial distress, like low wages.
Unemployment and greater poverty.
It seems like an oxymoron.
Essentially the more dollar stores have saturated an area.
The worst off residents financially become.
And this is just plain sad.
Does this come as a surprise to you?
So what explains this connection?
Are dollar stores causing financial hardship or just filling a consumer need as economies decline.
Well, some emerging research suggests both dynamics occur in tandem creating a truly vicious cycle.
Here are some of the main critiques of dollar stores and their economic impacts.
The first is this, there is normally limited selection and very poor quality.
The ultra low price point inherently limits inventory variety and caps, product quality just based on the price.
Shoppers are essentially forced to choose from a narrow selection of generic low end goods, often packed with sugar, salt, and preservatives verifying the safety integrity of the supply chains proves very challenging.
Yes, dollar stores offer affordability, but they excessively sacrifice consumer choice and nutrition.
This concerns me greatly from a health perspective, especially for families and communities lacking alternative stores.
The truth is this.
In some communities, there are no other alternatives and the dollar stores have capitalized on this situation.
Just ride through suburban America and you'll see towns that have nothing other than a dollar store for its residents.
That's really a sad situation.
Let's move on to number two.
They prompt other businesses to close.
Just as the big box stores have done in the past, when dollar stores gain a foothold and rapidly expand other retailers struggled to stay open.
Their convenience, lower prices and advantage of carrying basic necessities appeals to main street shoppers.
But this truly creates unfair competition against local groceries.
Pharmacies and those specialty stores.
Once striving downtowns are being hollowed out as beloved businesses close.
Residents living near dollar stores often suffer, reduced access to fresh quality foods like fresh vegetables and fresh meats and fresh produce.
Efforts to stimulate economic development, face additional barriers with fewer incoming businesses.
They're basically closing down.
So let's move on to number three and that's low wages for employees.
Dollar stores, tout job creation.
But what level of pay and benefits do employees actually receive?
The truth.
Is this folks compared to other discount retailers, dollar store chains significantly underpay cashiers, average, just $9 an hour, rarely receiving benefits like insurance or paid time off and their schedules fluctuate wildly week to week making second jobs almost impossible.
But here's a funny thing.
Not funny, but sad.
The CEOs of these stores have seen income's balloon.
For example, the CEO of dollar general took home $10.6 million in 2020.
That is quite a mismatch compared to those laboring in the stores.
And finally on to number four.
They offered limited support for communities.
If you think about this.
Successful companies have ample resources to support communities where they operate and pay taxes.
However dollar stores are remarkably un-involved locally.
The customer base often includes many fixed income seniors and welfare recipients.
yet sponsorship of community events, skews to be non-existent.
Property tax payments also sorely lag, comparative businesses.
For stores raking in billions annually, not giving back substantially where outlets are located.
Aggravates economic struggles in the poorest of our communities.
Well, those are my concerns.
But let's now shift our focus with some potential solutions.
Clearly the legitimate concerns exist on how saturation of dollar stores harm community prosperity.
Resisting new stores has proven complex because of their convenience and affordability, which is so valued by their very consumers.
Public policy changes like zoning restrictions or incentive programs that promote self service groceries.
Show some promise, but real change, likely requires consumer awareness, coupled with communities organizing to demand more social responsible retailers.
Groups like the Institute for local self-reliance provide excellent guidance on constructive community centered actions.
Here's some of their ideas.
And the first one is this.
Patronizing locally owned businesses whenever possible.
This is critical.
We need to support small businesses which have traditionally been the center of the community and do support the local communities where they operate.
Number two pressuring dollar chains through boycotts and petitions to improve wages and benefits for their workers.
Just don't shop there.
Folks.
If we don't use their services, they're not going to be able to grow.
Of course, this is easier said than done based on the socioeconomic community served and the lack of alternatives in many of their communities.
Number three.
Advocating at city councils and regional economic boards address vulnerabilities that dollar stores magnify.
You have to be vocal.
You have to get involved.
If you want to see meaningful change,
number four, supporting efforts to attract new grocery stores, farmer's markets and other retailers.
To underserved areas.
Consider working with local retailers to establish local markets.
Where local retailers can sell their products.
Produce locally and produced their services in a local market.
Personally, I plan to think deeply if I really need to shop at dollar stores, especially since better options exists to purchase many everyday items.
What about you?
I'm curious if today's topic has shaped your views on dollar stores.
Or if you have ideas to drive change, Visit askralphpodcast.com to share your perspective.
Well, let's recap what we've covered today.
Dollar store seemingly provide value with their low prices yet economically damage, many communities.
They pervade.
Raising awareness on their hidden harms represents a vital step towards finding a solution.
Now more than ever families face extremely challenging financial decisions.
Around affordability and access to basic goods.
My prayer is that corporations act more responsibly and communities receive the opportunities they deserve.
If these dollar stores trouble, your conscious, like they do mine yet.
Circumstances leave fuel alternatives.
Take comfort in Proverbs chapter 19 verse 21, which reminds us this.
Many plans are in a man's heart.
But the purpose of the Lord will prevail.
You've got to have faith that God can redeem.
Even these exploited business practices for his glory.
It is truly sad that it always seems that those who can afford at least are often the most taken advantage of in the end.
And I truly believe that these dollar stores are taking advantage of those who can least afford to be taken advantage of.
So I'm going to ask you to do me a favor.
Please share this episode with others and let's spread the truth about these dollar stores.
And their impact on our communities.
Do me a favor and share this episode with five of your friends or family members, and let's get the word out.
People need to understand what these dollar stores are doing to the people who can least afford it.
In closing, please reach out.
If you need guidance in, navigating tight finances.
I do offer financial counseling.
You can get that right on our website.
That's askralphpodcast.com/store.
The challenges faced today may feel crushing.
But we can walk this journey together.
So as I always say, stay financially savvy out there and make God bless you abundantly.
Outro: Thank you for joining us on the AskRalph podcast.
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And remember, financial issues don't have to be complicated.
Just AskRalph.
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Saggio Accounting Plus and AskRalph Media Inc.
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