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  1. #1

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    Fredís are closing everywhere, but Dollar Generals are booming...

    Can someone who knows about retail tell me the difference?


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  2. #2
    DGs are springing up in very small communities all around me. They get in these small areas and they roll bc it's just them and convenience stores. No idea how well the DGs do in bigger cities, but I know they have to be killing it in the rural areas


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  3. #3

  4. #4

    My Take

    There have been so many DG type stores to open, in remote locations,

    that they have damaged Fred's normal sales intake.

    Fred's is trading at sub $1.00 (36cents) and I think just kicked out of the stock market.
    Jack may be gone, but he is "EVER PRESENT"


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  5. #5
    Dollar General is building lots of stores in small rural markets with not much if any competition. Where else you going to shop in Noxapater or Artesia?


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  6. #6
    Fatboy's Avatar
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    All brick and mortar places are under serious strain from online purchases. Looks like fred's is restructuring and getting rid of underperforming stores and starting with those that are near the end of their lease agreements.


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  7. #7
    Quote Originally Posted by Cat Duck View Post
    Can someone who knows about retail tell me the difference?

    Fred's got into trouble with real estate. DG or Family Dollar doesn't own their store properties. They lease. If they're in an underperforming market, it's easier for them to exit. Fred's didn't use that same business model, and it's crushed their company.


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  8. #8
    punterjoe's Avatar
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    Part of the reason Fred's are closing stores is Walgreen's. Walgreen's is buying out a lot of Fred's locations that are close to their pharmacies.


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  9. #9
    Fredís are closing because they decided to buy out their privately owned locations and therefore are closing many.

    Also has to do with their pharmacy business being bought out


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  10. #10
    I always tell my kids to apply their brake anywhere near a DG location. People always last second stopping to turn in a parking lot. 2nd biggest danger besides a texting driver! Ha


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  11. #11
    Can't confirm, but I believe DG is a privately owned debt free company. That always helps.


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  12. #12
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    Quote Originally Posted by Grove Sh*tter View Post
    Can't confirm, but I believe DG is a privately owned debt free company. That always helps.
    Low overhead, cheap and small employee base, 35-80 group loves them.

    My 80 year old Mother makes me go with her to the one in Smithville and Amory each time I visit so she can show me the deals she lives on.


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  13. #13

    These cats have opened stores

    in remote area, 8/12 miles out, to service small communities.

    Either very smart, or will bite them in the ass, eventually.
    Jack may be gone, but he is "EVER PRESENT"


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  14. #14
    Quote Originally Posted by Grove Sh*tter View Post
    Can't confirm, but I believe DG is a privately owned debt free company. That always helps.
    You can confirm, really easily actually.

    DG is public and they have about $2.8 billion in debt.


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  15. #15
    The real downturn of Freds is when the Baddour family gave up management....at least that is my opinion......


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  16. #16
    Quote Originally Posted by punterjoe View Post
    Part of the reason Fred's are closing stores is Walgreen's. Walgreen's is buying out a lot of Fred's locations that are close to their pharmacies.
    Fred's tried to buy Rite Aid and when that fell thru, Fred's stock basically crashed. Walgreens then jumped in and bought the Fred's pharmacies. It's now just a matter of time before all their stores are closed.


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  17. #17
    Our local Freds is on this latest list of stores to be closed. The list was just made public in the past few days.

    I know the pharmacy manager there-sheís a local gal. She told my wife and me after church today that the store will be closed but that the pharmacy will remains open as a ďpharmacy expressĒ location. We have 3 dollar stores in our community (Dollar General, Family Dollar and Fredís), so losing one of those is not huge. The pharmacy situation is a little different because there are only 2 pharmacies in town and if they closed Fredís pharmacy we would be down to one remaining drug store. The nearest pharmacies are 20-25 miles away. Losing that pharmacy would be a huge loss. Sure, you can get prescriptions through the mail, but there are lots of older people who canít navigate the technology that is involved in online shopping.


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  18. #18

    Correct, leadership change

    Quote Originally Posted by oldjoedawg View Post
    The real downturn of Freds is when the Baddour family gave up management....at least that is my opinion......
    From what Iíve been told, they were rolling along fine, aka profitable but not record setting. They changed CEOís (maybe after main shareholder change, not positive) and went for the get rich quick plan. Made a public display of trying to buy Rite aid, but never had the money to make it happen, made the share price jump until it was clear the whole thing was a joke and shares price plummeted. (This may be when the current owners got involved). The investment group that is the current primary shareholder is gutting them from the inside. They sold off the pharmacies to Walgreens for a nice chunk of cash and pulled it out off the business. They also own Payless shoes and are doing the same to them. Both companies just relocated their headquarters to Dallas. They are in the same building, and are paying a nice monthly rent to the landlord, who happens to be the investment group that is the primary shareholder. Itís a beautiful example of how to turn a quick profit buy butchering your milk cow. Expect them to declare bankruptcy soon to avoid paying some debts (I donít know how that works, but I need to figure it out). The current owners will let Fredís die after turning their profit, and then theyíll go do it again elsewhere.


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  19. #19
    A few years ago Fred’s was debt free and had cash in the bank. Primarily I believe bc of their pharmacies. I have not kept up with it but the Baddour’s are a fine people and Fred’s started in MS. If you can support them vs DG I do.

    Disclosure: Paul Baddour was my father’s uncle so I spent my childhood at family reunions with them.


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  20. #20

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    Quote Originally Posted by karlchilders View Post
    in remote area, 8/12 miles out, to service small communities.

    Either very smart, or will bite them in the ass, eventually.
    Do they get any subsidies for taking EBT? Always been curious as to how that works.


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  21. #21
    Maroon Eagle's Avatar
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    Dollar General is placing their stores in Food Deserts serving the small towns and cities that have been abandoned by groceries and supermarkets.

    My hometown lost its last grocery store earlier this year and folks are either going to Dollar General or driving further.

    Forbes article: Link.

    CityLab article: Link.

    Washington Post article via Chicago Tribune: Link.


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  22. #22
    Exactly. They are expanding the offerings of their stores too...... More traditional grocery (fresh produce and meat), etc. There is already a "Dollar General Market" in Canton.

    https://www.supermarketnews.com/reta...uce-450-stores


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  23. #23
    Maroon Eagle's Avatar
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    A big consequence of that is that the Walgreens pharmacy I go to has had trouble digesting all the Fred's customers and their service has suffered-- folks are fed up with Walgreen's and are looking for alternatives.

    While I like to support locally owned businesses, sometimes their schedules don't work with mine. I had to go to Walmart to get my second shingles shot earlier this year.


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  24. #24
    From the merchant standpoint, I don't think it's much different than taking a credit card.


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  25. #25

    For those of you who have read Good to Great, this is an example

    of one company making the transition by adapting to changing markets, while another sits idle.

    As Dingo said, some of it is Leasing vs. Owning real estate, which makes DG more nimble, but also such things as reducing the footprint of their stores (Fred's still has a lot of larger older stores that are dinosaurs at this point that they own and can't escape), putting a new small freestanding store closer to rooftops so people feel as if they can "run in and run out" easier (whether that's true or not), and as someone else mentioned, adapting their merchandise (e.g., selling groceries.)

    This is an overly simplistic statement, but one company has made smart decisions over the last decade or so, and one has not.


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  26. #26
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    Adding Fed Ex Services to Dollar General too.

    https://www.businessinsider.com/doll...walmart-2019-6


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  27. #27
    The reason DG is doing better is the smaller stores. Theres plenty of times that I need just 1 or 2 items and rather than walk so far in Walmart to get it I will stop by DG and be in and out. So if Fred's wants to survive they have 2 options, be smaller stores or a bigger store that has everything under one roof like Walmart. Their best bet is to go to smaller stores and not compete with Walmart.


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  28. #28
    CVS has the potential to knock out Walgreens. Most have a drive thru which helps alot too.


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  29. #29
    I can go in a DG and buy Bread, Milk, Cereal and a 6 pack of beer in less than 2 minutes.


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  30. #30

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    Quote Originally Posted by Leeshouldveflanked View Post
    I can go in a DG and buy Bread, Milk, Cereal and a 6 pack of beer in less than 2 minutes.
    It takes that long for the cashier to put down her bag of Funyuns at every DG Iíve been in.


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  31. #31
    The main thing is what was mentioned above. They have a DG 12-15 miles from every area with a grocery/Walmart. Where I live it is 15 miles in any direction to a Walmart/Pig/Sunflower but it is 1 mile to a DG. Milk, bread, eggs, heck even dog food if I forgot to get some during the week. Very quick and super convenient. They are getting a large chunk of my grocery/sundry $$s due to convenience. Also my kids will hop in the old truck anytime they need a box of popsicles or ice cream and pop into DG. Walmart tried something similar but just really never made it work.


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  32. #32
    Doesnít Like Tennessee
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    Also, I think DG is a franchise model with a low cost of entry and franchise fees well under $50k


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  33. #33
    Quote Originally Posted by Bulldogg31 View Post
    Also, I think DG is a franchise model with a low cost of entry and franchise fees well under $50k

    You got some bad information. DG's, Family Dollar's, Dollar Tree's are 100% corporate owned. They do not, however, own their real estate. They get developers to build to suit, with 10 year leases. Generally, the lease terms pay for the property and development of the store in that 10 years, so at the end of the lease, the developer has a fully paid for building. Downside for the developer is, by the end of that 10 years, those companies are generally ready to freshen that market with new real estate, or move on to another location (if that location isn't producing). Dollar Tree owns Family Dollar. We do work for all of these retailers, on the network, POS, and security side.
    Last edited by ababyatemydingo; 06-24-2019 at 10:33 PM.


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  34. #34
    Dollar General invests in Data Analytics whereas Fred's has not done so. Their back office is impressive for a company in the industry they are in.

    Quote Originally Posted by Cat Duck View Post
    Can someone who knows about retail tell me the difference?


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  35. #35
    the peeper's Avatar
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    That sounds like a "white death" snow shopping list if you added toilet paper
    The poster formerly known as: dawgebag


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  36. #36
    the peeper's Avatar
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    There are now 5 DG's in Starksville, a new Family Dollar, and a Dollar Tree along with CVS and Walgreens. Throw in the Wal Mart Market and we are about to pass the number of chicken, burger joints, and Baptist Churches.
    The poster formerly known as: dawgebag


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  37. #37

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    Quote Originally Posted by LexSCDOG View Post
    Dollar General invests in Data Analytics whereas Fred's has not done so. Their back office is impressive for a company in the industry they are in.
    I figured they had some good information that led to their choosing of locations.


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  38. #38
    Actually there are 6 DG's if you count the one on the edge of town across from William Wells on 182.


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  39. #39
    Lowndes County has around 13 Dollar Generals .


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  40. #40
    Theyíre doing quite well in struggling inner city neighborhoods. I was listening to something awhile back and they were saying dollar stores have become de facto grocery stores in these areas. Itís become a public health issue because the vast majority of dollar stores donít have fresh food.


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