Thursday, February 09, 2012

What Dollar Store Locations Reveal About America

How does the concentration of dollars stores correlate with various socio-economic factors?  Here are some interesting results from a study featured in The Atlantic:
 
1. The correlation between dollar stores and median income is significant and negative (-.57).
 
2. Dollar stores are concentrated in states with lower levels of education or human capital. The correlation is again significant and negative, even greater than for income (-.77).

3. The geography of dollar stores also tracks to the country's political divide. Dollar stores are positively correlated with the share of voters who backed McCain (.52) and negatively associated with Obama voters (-.47).

4. Obesity, smoking and crime also come into the picture. They are positively associated with the percentage of adults whose body mass index is greater than 30 (.72) and the percentage that smoke (.6).

5. Dollar stores states are also positively associated with property crime (.34), especially burglary (.54), and violent crime (.3), especially murder and manslaughter (.49).

6. Religion too plays a role. Dollar stores are positively and significantly associated with the percent of people who say religion plays an important role in their daily life (.71).

20 Comments:

At 2/09/2012 9:50 PM, OpenID arbitrage789 said...

Big concentration in red states.

If the company becomes big enough, the political left will go after them like they do Walmart.

 
At 2/09/2012 10:34 PM, Blogger W.E. Heasley said...

“We are awakening to a dollar-store economy," proclaimed The New York Times Magazine this past summer.”

“It's not poverty that's driving the boom, but anxiety.” – Richard Florida, The Atlantic

-Or-

Did the dollar store concept create value were none existed before? Is it not really about awakening to creating value……rather than missing the point and remaining un-awakened by spending dream time of sugar plums dancing in one’s head regarding anxiety, weight, crime, religion, voting or any other gooey socio-economic claptrap one can chart and graph?

 
At 2/09/2012 11:19 PM, Blogger Buddy R Pacifico said...

Do dollar stores really sell everything for a dollar or less?

Dollar Tree does indeed sell everyhing for a buck at the most.

Their Canadian company, Dollar Giant is different in that the top price is $1.25 (Cad).

Dollar Tree does have a premium price subsidiary called Deal$. Deal$ has almost everthing for less than $5.00 dollars, but a few items are a little more.

Dollar stores seem to be in almost every rural town in the South. Wages are lower in rural America, and these stores provide a tremendous variety of products, at very affordable prices.

 
At 2/10/2012 12:29 AM, Blogger Benjamin said...

Dollar stores are huge in Los Angeles, and I patronize heavily. I haven't had a Come to Jesus moment yet in the dollar store, but maybe.....

 
At 2/10/2012 3:48 AM, Blogger PeakTrader said...

Dollar stores also reveal little inflation, since 1982 (although, some items are lower quality or smaller):

April 30, 2010

"Eric Schiffer, CEO of 99 Cents Only stores, the fourth-largest dollar-store chain in the country:

"I think it's great for a customer to walk in and know they could afford any single item on the shelf, and it makes everyone feel like a millionaire when they're in our store."

They haven't raised their prices — or, I should say their price — since 1982...So, why whine about inflation?

So off I went in search of the savvy consumer. I met Matt Wright in front of bathroom products. Twenty percent more free on shampoo. Bonus size deodorant. I asked him how he chooses.

MATT WRIGHT: The biggest one. I should probably get this shaving cream. "Super Value, 16-Ounce Size."...Just like the three bars of soap for a dollar. They're 2.6 ounces. Now, is that really better than two bigger bars for the same price? Or would my dollar be better spent on the 7.5-ounce liquid soap that says 20 percent free? There's the four-pack of 2-ounce soap and the two-pack of 2.9-ounce bars, too...And they're all a dollar?!

Am I being cheated? It turns out, no!

CUSTOMER: Inflation sucks! The dollar store rocks!

That's right. At the dollar store, I'm Alex Goldmark, for Marketplace."

 
At 2/10/2012 6:26 AM, Blogger Larry G said...

dollar stores go where WalMart does not go or where the demographics don't support the footprint size of a typical WalMart Store.

they are often cheaper than WalMart on some items but quality if funky also.

they've got WalMart thinking about adding smaller footprint versions so they can get into these smaller markets.

 
At 2/10/2012 6:49 AM, Blogger john said...

Is Dollar stores really sold it for an dollar??? And whats their Store Hours.

 
At 2/10/2012 8:36 AM, Blogger Stan said...

Wow. This study is about as useful as noting that Democrats are far more likely to commit serious crime, do drugs, collect welfare and food stamps, and work for the government.

 
At 2/10/2012 9:59 AM, Blogger Observer said...

I wonder if the study did any correlation with parenthood.....because I take my kids to dollar stores sometimes.

They actually have great kid-junk and even have some useful items.

I am not exactly poor.....and may well be middle-class.

 
At 2/10/2012 10:02 AM, Blogger Walt G. said...

I thought this was a map of right-to-work states at first glance. Happy UAW White Shirt Day!

 
At 2/10/2012 10:17 AM, Blogger Gene Hayward said...

I am sure Dollar Store Inc would probably LIKE to be in some of the big population states that currently dont have one, but just by definition they need to have a cost of goods sold of something LESS then $1.00. If it is a high(er) tax/high(er) regulation State, does that make it less likely they will open a store there? Perhaps this is a map more suitable to describing a State that is more friendly to low margin businesses than anything else. Just a thought from someone who has operated a low margin business before...

 
At 2/10/2012 10:53 AM, Blogger Seth said...

I'm not sure the range is very compelling to me. The chart goes from 0.4 to 1.6 per 10,000.

It seems like a better measure would be dollar store sales volume per capita, as the geographic density may just be pointing to more spread-out population.

On another note, my wife has become a fan of the $0.50 greeting cards at the local Dollar Tree.

 
At 2/10/2012 10:58 AM, Blogger PBC said...

There are so many things wrong with this analysis, it will be interesting to watch how many so called experts agree with the findings.
First:
1. The biggest dollar store companies like Family Dollar began in the south so naturally there's going to be a higher concentration. Why doesn't the Atlantic compare locations of bankrupt retailers like say Kmart (hq in Michigan), and conclude failed retailers are more likely to vote for Obama?
2. If you look more closely at the location by zip codes, you'll probably find an extremely high concentration of dollar stores in zip codes that vote overwhelmingly Democratic. To simply label the stores as red state locations is nothing more than gerrymandering the stats.

 
At 2/10/2012 11:19 AM, Blogger Jon Murphy said...

PBC,

No one arrived at these conclusions. All that is being reported is correlations. Correlation does not imply causation.

 
At 2/10/2012 1:18 PM, Blogger Ron H. said...

"they've got WalMart thinking about adding smaller footprint versions so they can get into these smaller markets."

Reference please.

 
At 2/10/2012 1:21 PM, Blogger Ron H. said...

Peak

"MATT WRIGHT: The biggest one. I should probably get this shaving cream. "Super Value, 16-Ounce Size."...Just like the three bars of soap for a dollar. They're 2.6 ounces. Now, is that really better than two bigger bars for the same price? Or would my dollar be better spent on the 7.5-ounce liquid soap that says 20 percent free? There's the four-pack of 2-ounce soap and the two-pack of 2.9-ounce bars, too...And they're all a dollar?!"

Maybe Matt Wright should consider getting a life.

 
At 2/10/2012 3:53 PM, Blogger Larry G said...

"they've got WalMart thinking about adding smaller footprint versions so they can get into these smaller markets."

Reference please.

http://en.wikipedia.org/wiki/Walmart#Walmart_Express

 
At 2/10/2012 5:10 PM, Blogger Ron H. said...

Reference Please.

(reference provided)

Thank you.

 
At 2/10/2012 8:04 PM, Blogger sethstorm said...

PBC:

3. The geography of dollar stores also tracks to the country's political divide. Dollar stores are positively correlated with the share of voters who backed McCain (.52) and negatively associated with Obama voters (-.47).


The data seem to prove you wrong.

 
At 2/13/2012 10:01 PM, OpenID dollarstoremerchandise said...

Dollar Stores are implications that people are intelligent enough to do business with cheap but very useful items.

 

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