July 11, 2011, - 3:19 pm

No Dolla? Holla!: Dollar Store Slump Shows Just How Bad Obamaconomy is

By Debbie Schlussel

When people are pinching pennies this tight, they won’t waste even a dollar on non-necessities.  That’s what dollar store owners are learning with slumping sales.  The typical dollar store splurges are gone.  They’ve dried up.  Shows just how bad the Barack Obama economy is, with no end in sight to rising unemployment and gas prices.  This story just begs changing of the “old” urban saying, “No dolla, no holla,” to “No dolla, HOLLA!”  You better holler.  Or America will keep sinking. Right now, America has a bunker mentality. But if you just hide in the bunker for the long haul, things won’t move or change. And lest you think I blame only Obama, think again. The GOP runs the House. They are in the driver’s seat, and drove right to spending your money on the economy-saving organizations, NPR and Planned Parenthood. They are as much to blame as Obama for America’s misery and won’t make the hard choices OR the right choices.

Sales and profit growth have started to slump at the deep-discount retailers called dollar stores, after a robust performance during the recession, a sign that even fairly cheap toys and other small indulgences now are a stretch for some consumers.

In the past several weeks, Dollar General Corp., Family Dollar Stores Inc. and Dollar Tree Inc., the country’s three largest chains that sell sharply discounted food, household staples and other items in modest-size stores, all have missed their quarterly earnings targets.

All three retailers cited transportation costs due to rising diesel-fuel prices as a major reason for their earnings shortfalls. But the chains also said their price-sensitive customers, pummeled by high unemployment, stagnant wages and soaring gasoline prices, are buying more food and other basics like cleaning products, which have relatively low profit margins, and fewer higher-margin discretionary products, such as apparel and home decorative items.

Shoppers have become less likely to splurge, for example, even on a $5 die-cast Transformer toy or 2-for-1 children’s bathing suits at $7.

“This is a sector that was in nirvana during the recession, as customers traded down,” said Adrianne Shapira, a retail analyst at Goldman Sachs. “But now their shoppers have a bunker mentality. With all this mounting inflation crowding out discretionary purchases, it’s painful.”

The chains, meanwhile, are facing rising food prices that they have been reluctant to pass on to their struggling core customers, who typically have family income of less than $40,000. . . .

All three dollar-store chains continue to post same-store sales—or sales at stores open at least a year—that their bigger discount rivals would envy, with Dollar General, Family Dollar and Dollar Tree reporting gains in the latest quarter of 5.4%, 4.7% and 7%, respectively, from a year earlier. Still, Dollar General and Family Dollar, which sell a high proportion of food and household basics, have seen their sales increases drop from the torrid pace of just a few years ago.

Dollar General posted earnings for the fiscal first quarter ended April 29 that missed Wall Street’s expectations by two cents a share. But the biggest surprise was that its gross margin rate shrank by 0.63 percentage point, as the company marked down leftover winter clothing and home furnishings. It also refrained from passing along its higher commodity costs on such products as coffee, whose wholesale price has risen four times since December.

“We have 228 items that are priced at $1 that we think are incredibly important to our customers that we elected not to take price increases on,” Dollar General Chief Executive Rick Dreiling told analysts during a June 1 earnings conference call. “This sounds almost silly, but a $1 item going to $1.15 in our channel is a major change for our customer.”

Two weeks ago, Family Dollar, facing many of the same pressures as Dollar General, missed analysts’ earnings expectations by four cents a share for the quarter ended May 28. Its same-store sales gains also were lower than analysts expected, as was its gross margin rate, which fell by about 0.36 percentage point.

Family Dollar blamed the margin squeeze mainly on shoppers’s inability to afford more discretionary products.

Good luck, America. If things continue the way they are, we’re screwed. No, we’re already screwed.

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32 Responses

If this is the Hope, or the Change, it plain sucks!

P. Aaron on July 11, 2011 at 3:39 pm

Nicely written Debbie, as you claimed that your not just hold Obama responsible for the slumping economy, yes Obama’s policies are horrible for our economy today. But you also have to notice that the “economic meltdown” began four years ago under “George W Bush Jr.”! During that time he started to bailout the banks (ie, Goldman Sachs, JP Morgan, etc.) and his former Treasury Secretary Henry “Hank” Paulson did alot of BSing around and also former SEC Christopher Cox did the samething that Paulson did. And til this day neither Cox or Paulson hasn’t been investigated.

For you fake conservatives (that includes, Breitbart, Malkin, Hannity, Limbaugh, Levin, Ingraham, NewsBusters, NRO, TownHall, etc.) who continue to lick Bush’s shoes and say that, “buy golly gosh, Bush was the best conservative president ever, gee whiz”. In fact Bush was NO conservative at all, he busted the budget with a 1-trillion dollar deficit spending and added new entitlement(s), ie, prescription drugs, Bush also supported giving housing loans to people who couldn’t qualify and afford those loans, it was not just Barney Frank, Chris Dodd, etc.

Speaking of spending, I’ll go a step further, yes we have to cutback on spending, but we also have to cut some government programs, that includes, TSA, DHS (Homeland Security), and other useless government programs thats not quite worth it at all!

“A nation is defined by its borders, language & culture!”

Sean R. on July 11, 2011 at 3:44 pm

“NPR and Planned Parenthood”…really this is to blame for the economy?
Also what about the military budget that is so huge we can fight three different wars?

Pete Bone on July 11, 2011 at 3:45 pm

Bone is back doing his Leftist bomb-throwing. Guess someone has to fill-in for the Libs while Blitzer is booking another Flotilla trip. Really Bone, this article was really detailed and pin-pointed on the economics of the citizenship as well as companies that WERE flourishing during the recession and you get your knickers twisted by DS’ editorial (and very true!) comment. Priorities.

I like Dollar Tree but I have learned how to stretch my buck by only buying the stuff that is not only first rate (toothpaste, cotton-rounds, pet leashes, snacks etc.) but highly discounted. When purchasing food, one has to be very careful…some of the food I call “communist food” because the taste and/or quality is just rock-bottom. I always make a note when I take a chance on “Commie Food” that when MaObama really puts a nail in the coffin of the American Economy, this will be the type of slop that will seem like a delicacy. I also take time to be grateful of being able to have known good-tasting food. The future may bring us something else.

And I’m glad DS pointed out about the Republicans. They have done jack-sh** since they have taken over. As odious as the Dems are/were…they put the petal to the metal when they had control of both the house and senate…with NO apologies. I am tired of the genital-less Republicans.

And I think this is a good time to point out that fraud Darrell Issa. NEVER have I seen such an odious character be NOT seen for what he is (other than ZerObama). He has done NOTHING and still, there are Conservatives who don’t even have a clue what a fraud he is STILL making excuses for him. It’s annoying.

Skunky on July 11, 2011 at 4:25 pm

Pete Bone, you have a point about the military budget, and for the wars, I think we ought to leave Iraq, Afghanistan and Libya. Iraq, I don’t know why where still there eight years later, with us invading Iraq during Bush’s reign, we made Iran more stronger and potent and from last I hears and read, we have more contractors than soldiers in Iraq. Afghanistan, I have no idea WTF were in Afghanistan for? And I don’t know why Obama increased the troop size in Afghanistan two years ago. As far Libya is concerned, we shouldn’t be there in the first place, Gaddhafi isn’t NO threat to us at all. I blame some conservatives, some liberals, CAIR and other muslim front groups for being Libya, they were the ones who demanded Obama to invade Libya, they didn’t know that they were backing al-quaida, hezbollah, hamas, etc. that wanted to overthrow Gaddhafi.

Debbie wrote an article about the Libya situation a few months ago and she claimed that Libya should solve their problems and we (the USofA) shouldn’t be in Libya. Pete Bone, I think were in Iraq, Libya and Afghanistan for the “Military Industrial Complex’s” interest, and a forner president over 50 years ago gave a speech about the Military Industrial Complex.

“A nation is defined by its borders, language & culture!”

Sean R. on July 11, 2011 at 4:27 pm

    Sean, I agree with you as far as the three wars and us still slogging away in the ME but don’t confuse Bone of thinking the way we do. He is a Liberal and thinks that the USA Military budget should be disseminated into other things like Education and other Liberal commie sink-holes.

    Sean, I think we should NOT be in he ME if we are gonna fight PC wars. I am 100% against that and only wish I knew as much as I know now when Bush initially went into Iraq and Afghanistan. I don’t believe in fighting with one hand behind our backs, silly and dangerous rules of engagements and nation-building.

    As you and I know, Michael Savage was correct with his fear of what Bush going into Iraq would do for the benefit of Iran. When I first read that it scared me and I hoped against hope. Now I understand so much more and his being right scares me everyday. Why should our best and brightest die and be maimed for these primitive charlatans? I’m sick of it.

    And lastly, I’d love to know DS’ opinion on Samantha Power and how the US going into Libya is her brainchild/dry-run for her silly and disgusting R2P against ISRAEL …to force Israel to give all it can to the “Palestinians” under UN military power. No one talks about that enough. Samantha Power is a far, far uber-leftist who believes in using war to change the World into HER utopian dream.

    Skunky on July 11, 2011 at 5:16 pm

      “USA Military budget should be disseminated into other things like Education and other Liberal commie sink-holes.”
      That’s not really my point and your are smart enough to know that. My point is that our unregulated military budget is draining money out of the whole system.

      And education is a liberal sink-hole?

      Pete Bone on July 11, 2011 at 8:14 pm

        C’mon Bone. Stop dicking around. You are a Liberal. Embrace it. You would think you would since you choose to be one. You don’t even hide it in every one of your posts.

        I’m proud to be Conservative. At least I can call out my side when they are wrong. Trouble is they are not as wrong as Liberals and are too wimpy for the good of America.

        Skunky on July 11, 2011 at 10:36 pm

          Skunky,

          I never said I wasn’t a Liberal, what I said was,”unregulated military budget is draining money out of the whole system.” I was trying to make a point about how we spent money not my overall political views.

          If you read that far, you’ll notice just after my post the Shadow responded about the something in my post. This makes much more sense than just randomly shouting,”Liberal!!.”

          And my point is not that we shouldn’t have a military, of course we should, but it shouldn’t get the whole pie.

          Also, you do realize in your last sentence you called conservatives wimpy?

          Pete Bone on July 12, 2011 at 10:37 am

        “And education is a liberal sink-hole?
        Pete Bone on July 11, 2011 at 8:14 pm”

        Yes it is if you happen to live in Buffalo, New York which has an over 50% failure rate in High school Graduates. Over 800 million spent per year to fail more than half the Seniors in high school?!..yup, that’s a sink-hole.

        theShadow on July 12, 2011 at 12:09 am

          Bone, it is very tiresome when I call you out (by cutting to the chase) on a point DIRECTLY and you do a little shuck and jive trying to somewhat obscure what I see as screaming Liberalism. I am pointing it out so others who may not see or are more polite than I KNOW that you’re being a stealth Liberal. You being a Liberal (and I was once one) is the whole crux of your problem. I’m not gonna do the dance with you. I am gonna call you out on where you are coming from. You would think you would want to defend your Liberal ideology with facts.

          Yes, I did call Conservatives wimpy. And I have not a problem with that. If they are, I will call them so. I am NOT a kool-aid drinker. Now perhaps I should have said “Republican” because I do not consider myself one (I would if they were not so wimpy BTW) but as a DS sort of Conservative, I have NO PROBLEM calling out other fake or lacking Conservatives. I am proud to be one. I found my way and I take umbrage at frauds and wimps who water down the concept and make if foreign from what I am. I don’t want Liberalism or excuses in my Conservativism.

          As you well know, Liberals can’t criticize their own because ideology trumps right and wrong. Right and wrong will ALWAYS trump my ideology.

          Skunky on July 12, 2011 at 12:08 pm

          Oh, and Bone, perhaps you should look into how the whole “pie” is cut. You have no idea.

          Military does NOT get the whole pie. And you thinking so is so Liberal Talking Points 101. All your objections are always text-book Liberal myths.

          Skunky on July 12, 2011 at 12:17 pm

Awesome article, Debbie.

DS_ROCKS! on July 11, 2011 at 4:31 pm

The man never worked in the free enterprise system, he is the least qualified President in history. AND everyone knew this going in, now he is completely lost and 2 and a half years of being in (far, far) over his head. (and on more than the economy)

“No, he can’t!”

Bill C. on July 11, 2011 at 4:57 pm

We are at the edge of any abyss, but President Obama seems to be more concerned about mobilizing his base with the Dream Act and Gay Marriage. Greens jobs seem to trump real jobs in his estimation. Mr. Obama considers his political base to contain people of any importance. He will probably win reelection by default in 2012, since the Republicans seen unable or unwilling to enter into a real critique of the man’s policies and governance. At best, they just nibble around the edges. Running on a platform of “We are not as bad as they are.” is not uninspiring and insipid, but unlikely to persuade anyone who is not already committed to vote Republican.

Worry01 on July 11, 2011 at 5:42 pm

    Normally, I agree with your take but people historically vote their pocketbooks. We can be thankful Obama has no clue on how to manage our economy. Bush left us a trillion dollar deficit and toxic bank loans but the Democrats turned it into a 10 trillion deficit with higher taxes and more spending. And we’re broke. We have to cut everything including military spending. We can’t afford to fight three wars any more. And Americans don’t think our Libyan misadventure served us well. We have to face the reality our children and grandchildren won’t have as good a future as our parents inherited. We took the wealthiest and most secure nation on earth and impoverished and weakened it in a generation.

    Some legacy.

    NormanF on July 11, 2011 at 6:26 pm

The economy is why Obama will NOT be re-elected in 2012. He has a record to run on and he is NO Ronald Reagan. I can’t say much for the GOP but at the moment at least, its keeping things from getting worse. I suspect things will get a lot worse before it gets better.

NormanF on July 11, 2011 at 6:17 pm

    The economy sucks now and has for several long years now but if the economy starts to pick up over the next 12-18 months, we are f-cked because people in the US have a VERY short memory.
    We are in the worst economy ever in the US and there is no end in sight but there might be false signs of the economy improving the the thing that scares me is that it might just happen around election time.
    The US (and civilized world) cannot handle 4 more years of an amateur muslim in the White House and if for some reason he gets reelected, we are DONE.

    Stephen on July 11, 2011 at 10:00 pm

Hey, Obama ran on the promise of Change. Only problem is that the change he’s left us with doesn’t add up to $1.

Brian R. on July 11, 2011 at 7:17 pm

Good thing Obama is NOT Reagan. Reagan raised the national debt from $997 billion to $2.85 trillion!

Lee on July 11, 2011 at 7:38 pm

    Ah, nice try Lee. When Bush took office, the national debt was $5.73 trillion. When he left, it was $10.7 trillion. That’s a difference of $4.97 trillion. For 8 years

    $997 BILLION to $3 Trillon Reagan

    $11. TRILLION to $14 Trillion Obama **in just TWO and a half years.***

    Reagan is NOT Obama…indeed! Obama has done more damage in 2 1/2 years than Reagan did in 8…and he had “Star Wars” and the fall of Communism under his belt. What does your hero have?

    Skunky on July 12, 2011 at 12:04 am

This what happens when a Token is taken too far. A fool who has no idea to run a lemonade stand let alone the world’s largest economy.

CaliforniaScreaming on July 11, 2011 at 7:54 pm

Skunky said:
“I think we should NOT be in (t)he ME if we are gonna fight PC wars. I am 100% against that…I don’t believe in fighting with one hand behind our backs, silly and dangerous rules of engagements and nation-building”

These were my thoughts when we went into Iraq right after Afghanistan. Why go ino another ‘war’ you have no intention of winning? A total waste of resources and American lives in my opinion. And the only Nation we should be concerned about building is our own.

theShadow on July 12, 2011 at 12:02 am

I agree that BOTH the DemocRATS and the GOP are to blame for the Great Recession and the lost decade, which is going to follow. If the GOP controlled House caves in on the debt ceiling, this economic mess will lead to a lost generation. If the debt ceiling is raised, the U.S. Treasury will have plenty of money coming in to meet borrowing obligations without shutting down the federal government. Congress will be forced to cut spending, which is exactly what needs to happen. Waste, fraud and mismanagement is epidemic in the federal bureaucracy. Congress needs to cut a minimum of 10% from EVERY government agency, including Defense and Homeland Security. EVERY federal agency is bloated and inefficient. The massive travel and “training” budgets in every agency and Department should be drastically cut. This result in the loss of bull shit “paid vacation” time and free airline miles for millions of bureaucrats while saving taxpayers billions of dollars over the “lost decade”.

Bonzer Wolf on July 12, 2011 at 7:54 am

The reason I don’t buy stuff at dollar stores is because the Chinese made CRAP available there is usually NOT EVEN WORTH $1. So many products that are beyond utter embarassment for any self-respecting business person to produce and offer for sale… things that are utterly WORTHLESS right off the manufacturing line (i.e. screwdrivers with bits that don’t fit into the handle; toy train tracks so warped they won’t lay flat; etc. etc.).

Years ago people called the “5 and dime” stores “the junk store”, and yet the stuff you could get there 50 years ago is of course generations better than the unmittigated CRAP at today’s dollar stores.

Doda McCheesle on July 12, 2011 at 9:59 am

I wonder if part of the drop in dollar store business is for the reasons I don’t shop in them: most of their chinese made CRAP is not even worth 99 cents.

Many of the items sold at dollar stores are utterly worthless crap that any self-respecting business person with any kind of morals and conscience would be ashamed to produce.

Doda McCheesle on July 12, 2011 at 12:35 pm

Skunky,

I never said I wasn’t Liberal, I must wonder if you actually read before you type or just start in with the Kool Aid and talking point jokes.

The military gets 54% of the budget. Maybe if they got 45% we could fix education and keep NASA up and running.

Pete Bone on July 12, 2011 at 9:59 pm

Bone, you are beyond tiresome and love to project. I’d very bored with you and your dumb, Liberal ways.

You are STILL wrong with the amount of the budget Military gets and NASA was stopped by your hero Zero.

I’m sure you’ll turn it around as you always do, but I am moving on…

Skunky on July 13, 2011 at 12:29 am

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