July 28, 2004

IF EVERYTHING KEEPS COSTING LESS HOW DO THEY MEASURE IT COSTING MORE?:

Dollar stores gaining popularity across the U.S.: SHOPPERS COME FROM DIFFERENT INCOME LEVELS (Michele Chandler, 7/28/04, San Jose Mercury News)

Rock-bottom price tags are drawing more people than ever to dollar stores, from the caviar crowd to the working class.

Surveys show more than one-third of U.S. households shop monthly at a dollar store, where items sell for $1 or less. Some regular customers are in the top income level of $100,000 or more.

With their selection of goods priced at about $1, dollar variety stores appeal heavily to people on a budget. But increasingly, dollar stores are drawing those with a bit more spending money, too.

Freelance photographer Joe Espinoza recently loaded up on picture frames at a Dollar Tree store in San Jose while his teenage daughter Chanel checked out aisles brimming with baby powder, cat litter, sunglasses, shampoo, socks, gift wrap and even Bibles -- and each for $1.

``They're the same exact brands you find other places, just cheaper,'' said Chanel Espinoza, clutching a pack of hair clips and a greeting card. Her father, who also works as a buyer at Lockheed Martin, hits dollar stores around the Bay Area every week, snapping up everything from shampoo to salami and spending at least $40 each visit.


One of the many ways in which official measures manage to drastically overstate infaltion is by not taking such simple shopping into account.

Posted by Orrin Judd at July 28, 2004 2:16 PM
Comments

If you take that at face value, you're missing the point.

Dollar stores do not offer quality for quality. Buying crap for less does not raise your standard of living.

Posted by: Harry Eagar at July 28, 2004 2:31 PM

The inflation measure isn't interested in standard of living. It takes no account of improvements in quality. The highly computerized car you buy today for less hourly labor than your Dad spent on a primitive auto is simply considered to cost more.

Posted by: oj at July 28, 2004 2:37 PM

I've been in some of the new dollar stores. You can't call everything in them crap. You're always going to have an amount of chintz, but there's a lot of stuff there that's nothing to be ashamed of. I remember the first dollar stores in the shopping malls in the late 1980's - they had nothing but garbage, the new ones are nothing like them.

Posted by: Chris Durnell at July 28, 2004 6:14 PM

Works both ways, true.

But that wasn't the argument. The argument was that dollar stores demonstrate a decline in inflation, while they really represent a move to lower quality.

In general, tho' there could be exceptions.

Until it folded -- now what does that indicate? -- I used to buy spray starch at our dollar store. Spray starch is spray starch. Everything else was crap.

Posted by: Harry Eagar at July 28, 2004 10:42 PM

They don't demonstrate a decline in inflation. The inflation measure forbids shopping for products to fill the market basket. It's as if Wal-Mart had never existed and everyone still bought at Macy's.

So, as you say, spray starch stays $2.39 a can at your grocery store forever, even though you're buying it for $1.

Posted by: oj at July 28, 2004 10:48 PM

Easy-On Starch is $.92 at coopgrocer.com, and no sales tax, though you'ld have to pay shipping.

Posted by: mike earl at July 28, 2004 11:55 PM

For a deflation number of 8%?

Posted by: oj at July 29, 2004 12:01 AM

"The highly computerized car you buy today for less hourly labor than your Dad spent on a primitive auto is simply considered to cost more>"

And also has at least double the economic service life.

You are right, OJ. The technical term for that, if memory serves, is Hedonistic Inflation, and the inflation stats miss it completely.

Posted by: Jeff Guinn at July 29, 2004 7:36 AM

But I'm not buying spray starch for $1 any more.

Our dollar store went out of business four years ago.

Our discount grocery closed last month. (Ever wonder where all the Grade A butter goes?)

Buying crap from China does not amount to inflation.

I used to buy shoes from New England. They were moderately expensive but fit well and wore a long time.

I cannot get them any more because Bates went bust. I can get cheap shoes from Brazil, but they're worth less than they cost.

The quality of shoes I bought in the '60s is unobtainable now at any cost.

Posted by: Harry Eagar at July 29, 2004 2:57 PM

I still have the black wing tips I bought in college.

Posted by: oj at July 29, 2004 3:00 PM

Harry:

Buy Army surplus combat boots. Cheap, comfortable, and they last forever. I was in the Army for eight years, and I never wore a pair out.

Posted by: Michael Herdegen at July 30, 2004 2:26 PM

I still have the pair I wore in ROTC in 1964. But I never found them comfortable.

Posted by: Harry Eagar at July 30, 2004 3:42 PM
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