March 12, 2008: Dollar stores
To The Editor:
As a traffic engineer who has analyzed the impacts of hundreds of ‚Äúbig box stores‚Äù on host communities, I‚Äôve become familiar with the corporate steamroller tactics used to get the stores built and their predatory operating practices which use and abuse communities. I would hate to see the Village of Margaretville sacrificed to meet the short-term bottom line goals of two ‚Äúdollar stores‚Äù that see themselves as mini-Wal-Marts.
I did some research on the websites of the two corporations that seek to build dollar stores within and at the edge of Margaretville to see what kind of neighbors they would be. One is Dollar General, which has town approval for a site on Route 28 in Arkville. The other is Family Dollar, which has cleared a site next to the post office on Main Street in the expectation of a change of zoning which now restricts retail to the village center.
What I found suggests that care needs to be taken to protect the public interest. Contrary to its name, Family Dollar is no ‚Äúfamily‚Äù store. And General is no ‚Äúdollar‚Äù store. Both are corporate giants. Family is a $6.8 billion/year corporation with 6,400 stores in 44 states. General is a $9.2 billion/year corporation with 8,200 stores in 35 states. Both are investor-owned companies battling each other to meet stockholder demand for growth and profit.
Both companies solicit independent developers to identify sites for new stores (Family Dollar‚Äôs 2008 financial plan assumes 200 added stores). The greater Margaretville area barely meets their remarkably similar site criteria for a population of approximately 8,000 within a 10-mile radius trade area. Family Dollar further specifies a customer base of mostly low to moderate-income residents. Our area has about half the required potential customers, based on census data for the Town of Middletown (not counting second home owners who come and go and are not the stores‚Äô target markets).
Both stores seek to capture customers en route to their homes or other destinations and both sites fall short. General Dollar specifies 4,000 passing vehicles on the side of the dominant afternoon traffic flow, whereas they will get less than 1,000 westbound trips during this period on Route 28. Family Dollar will get only a total of about 400 cars a day going to the school or post office, meaning nearly every passing driver would have to shop at Dollar ever day to meet Family Dollar‚Äôs requisite 300 daily transactions. This will not happen,
Both corporate managements have put a new emphasis on food products because that‚Äôs where consumers feel the greatest pinch in their household budgets. General Dollar reports it sells nearly 70 percent ‚Äúconsumables‚Äù (milk, paper products and toiletries), with most sales at ‚Äúless than $10.‚Äù Family Dollar is wooing investors with a new direction of greatly expanded sales of ‚Äúfood, household paper products and home cleaning products,‚Äù including ‚Äúenhanced cooler sections‚Äù for perishable food. Family Dollar will bolster the new food emphasis, according to its CEO at a Deutsche Bank investors conference in mid-February, by introducing New Concept Stores. All new stores will utilize ‚Äúnew technology‚Äù that carefully engineers a maze of aisles to create a ‚ÄúTreasure Hunt shopping environment.‚Äù This is designed to make their ‚Äúcore customer‚Äù (a low to middle income mother with a household income of under $30,000) ‚Äúfeel good‚Äù about ‚Äúimpulse‚Äù buying of discretionary purchases.
If this manipulation of unwitting consumers does not pay-off sufficiently to meet corporate profit expectations, the predictable response will be to shutter the stores (General got rid of 400 stores last year.). This is relatively easy to do since not much is invested in the bare bones warehouse type buildings and little has been paid in taxes. For companies operating thousands of profitable stores, the loss of a few is simply a business write-off. The burden of empty store hulks on the abandoned communities would not even be a concern to investor-run bottom line operations.
The evidence shows that neither of the two sites comes close to corporate criteria for a successful store. If they under-perform and do not survive, Margaretville will be the loser. This dilemma points to the importance of the on-going Village and Town Comprehensive Plans, not corporate interests, in identifying the best use of limited development sites.
Brian Ketcham, P.E.,