30 United States The EconomistJanuary 27th 201812“T
HEY want to build one every four
miles,” says the cashier at Dollar
General, a discount shop, in Lewisburg, a
small town in the rolling hills of central
Tennessee. Situated on a big parking lot,
next to a provider of payday loans open 24
hours a day, a supermarket chain called
Priceless and Dirt Cheap, another south-
ern chain of discount shops flogging the
unsold or returned merchandise of other
retailers, the shop is one of three Dollar
Generals in Lewisburg. Tennessee is the
home state of Dollar General, which in re-
cent years overtook its rivals to become the
retailer of choice of low-income Ameri-
cans, so it has one of the denser statewide
networks of shops. Yet with well over14,000 outlets across America (about the
same number as there are McDonald’s res-
taurants) almost 75% of Americans now
live within five miles of a Dollar General.
“Over the last five years a new Dollar
General opened every four-and-a-half
hours,” says Garrick Brown at Cushman &
Wakefield, a property agent. The chain’s
profits have risen like a helium balloon
since the recession, to more than double
those of Macy’s, one of the most famous
brands in retail, in the past fiscal year. Its
market value isa whopping $28bn.
How does Dollar General thrive when
so many other retailers are struggling,
downsizing or, in the case of Sears, Bon-
Ton, 99 Cents Only, Neiman Marcus,Land’s End, Nine West and J. Crew, are
close to bankruptcy? One reason is that it
filled a void. “They set up shop where Wal-
mart does not want to make an effort,” says
Christopher Merrett at the Illinois Institute
for Rural Affairs, referring to the world’s
biggest retailer. Around 70% of Dollar Gen-
eral’scustomers live in rural places which
have been slow to recover from the reces-
sion. Another reason for its success is that it
caters to those who are financially
stretched. Dollar General sells everything
from packaged food and toys to linens and
household-cleaning products, but in small-
er packages for those who cannot afford to
buy in bulk. And although, contrary to
popular belief, not all items cost a dollar, a
quarter of them do; three-quarters cost less
than $5, and most of the rest will set you
back less than $10.
Dollar General promises low prices
and quick, convenient shopping, but so do
other dollar stores, such as Dollar Tree,
Family Dollar or the near-bankrupt 99
Cents Only. Their secret sauce, explains
Mike Paglia at Kantar, a retail consultant, is
to pick a good site. They vetthem diligently,
opening their shops next to highways, post
offices, churches or schools. (A church
close to the array of deep discounters in
Lewisburg assures its worshippers that
“God has a 100% refund policy”.) In Up-
town, a down-at-heel neighbourhood in
Chicago that ishome to one of the few Dol-
lar Generals in big cities, the company
picked a spot behind a big parking lot next
to a Shell petrol station, a branch of Chase,
Chicago’s most popular bank, and
Planned Parenthood, a non-profit offering
advice on family planning.
The typical Dollar General shopper is
white, working class and tends to rely on
some form of government assistance. “The
economy is continuing to create more of
our core customer,” the company’s chief
executive, Todd Vasos, told the Wall Street
Journalin an unguarded moment in De-
cember. He is also likely to be a supporter
of President Donald Trump, says Mr Mer-
rett, although this is changing as rural
America gains pockets of diversity, for ex-
ample next to slaughterhouses such as Ty-
son’s plant in Storm Lake, Iowa. Dollar
General has tried to expand in ethnically
diverse, left-leaning cities: in 2015 it tried to
buy the more urban Family Dollar. Last
year it took over 322 mostly urban stores
from a private-equity firm that had bought
them from Dollar Tree, which had
trumped Dollar General in the battle over
Family Dollar and needed to shrink a bit
for antitrust reasons. The new urban shops
will be laboratories for a different type of
customer. On a frigid evening just before
Christmas, the shoppers at Dollar Gen-
eral’s Uptown outlet were mostly black or
brown—and almost certainly Democrats.
Dollar General intends to continue its
vertiginous expansion, with plans to openThrift and profitOne buck at a time
LEWISBURG, TENNESSEE
Dollar General thrives where low-income families struggleLos Angeles warehouse squinted as he no-
ticed something fishy about a package
passing through his x-ray machine. He
punched a red button to stop the conveyor
belt and picked up the package in question:
he could tell that it had come from China,
but it had no return address. He slashed the
tape open with a box-cutter and found a
paint-roller with dime bags of white pow-
der taped inside.
The bags were passed to Jaime Pimen-
tel, anotherCBPemployee whose job is to
test the substance. Behind him on a shelf
sat a box of Naloxone, an opioid-overdose
antidote, in case Mr Pimentel accidentally
ingests fentanyl or another opioid. He
pressed a machine called a TruNarc onto aplastic bag full of powder and waited for a
reading. It came back inconclusive. Then
he used a metal scooper to sprinkle a small
sample of the powder into a more sophisti-
cated device called the Gemini, which re-
sembles a clunky Gameboy. It also failed to
match the substance to any of the 21 drugs
in its database, so the powder had to be
sent to a nearby forensic lab for further test-
ing, which could take a few weeks. “The
federal government has responded im-
pressively quick to the fentanyl threat,
which really didn’t escalate until 2015,” Mr
Knight muses. “But we’re still walking—
crawling really. It’s so hard to seize, that
when we do we almost have to say ‘Wow!
Good job!’” 7РЕЛИЗ
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