CBx Daily

Dollar General Keeps Prices Low Since A Dollar Saved Is A Penny Earned

Aug 2

By Shakera Moreland

  • Dollar General has no plans to increase prices at any of their stores
  • Nearly 75% of all Dollar General stores are located in rural and suburban areas

Have you noticed lately that the cost of everything, including food, has gone up? It’s not just you, it’s happening to all of us. According to the U.S. Department of Labor, consumer prices are currently at a 13 year high, due to the rising costs of meat and baked goods. What’s surprising is that local dollar stores haven’t received this memo, in fact, Dollar General (DG -0.04%) has said they have no plans to increase prices at any of their stores where it sells products at 20% to 40% less than drug and grocery stores.

Why This Matters: Nearly 75% of all Dollar General stores are located in rural and suburban areas, where 39% of African Americans live, and its largest demographic of customers happen to be consumers from this group. Typically, the low-cost chain has largely catered to customers on a tight budget to shop at the company’s more than 16,000 stores. Right now their average shopper comes from a household that earns $40,000 or less per year. In 2017, the U.S. Census Bureau released data showing the median income for an African American household was $39,490, putting them right in the Dollar General consumer sweet spot.

In a perfect world, being able to have stable pricing for goods would be great news for those that frequent these discount stores. Unfortunately, everything that glitters isn’t gold. A study conducted in 2021 by Campaign for Healthier Solutions, a group of over 200 health, science-based and environmental justice organizations, saw that more than 200 products tested from various dollar store chains, 54% of them contained at least one chemical of concern. They also found that 100% of the receipts that were tested contained a toxic chemical. As the most convenient way for some families to stock up on toys, snacks, and other items, this is definitely a cause for concern.

Situational Awareness: A few of the chain stores, namely Dollar Tree (DLTR +0.03%) and Family Dollar have committed to doing more to have a healthier supply chain with a marked increase in quality from previous year’s studies. Dollar General stores have not made any statements about their supply chain. Meanwhile, stocks for these stores continue to rise with Dollar General up 21% in the past year. In this case, a dollar saved by us is lots of pennies earned for them.

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