Price Wars: The Fall of Dollar Stores | Billionaire Tug of War | 1
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2014, Las Cruces, New Mexico. Mimi Jacobs grabs hold of her seven-year-old son's hand before he runs off through the aisles of their local family dollar store. No. No toys today. We're just getting a couple of things that we need. Mimi checks the cash in her purse and grimaces at the few dollars that are left. She's got to survive on this until her next paycheck. They've run out of toilet paper and they've got nothing for dinner that night.

She heads to the freezers and searches for something filling and cheap. Looks like it's frozen pizza again. She heads down the rest of the narrow aisles, edging around the stock trolleys full of boxes that haven't yet been unpacked. She prefers Walmart. It has wide aisles, bright lighting, and neatly stocked shelves. But the nearest Walmart is 20 miles away. She can't afford the gas to get there until she gets paid. So she's grateful there's a store like this close to home.

Family Dollar sells items in smaller sizes too, so she can get just enough to last until the next big shop. She ends up spending more in the long run, but it's the only way she can make the money last. She picks up a four-pack of toilet paper. Price? Two dollars. As she puts it in her basket, she spots a red tag indicating a further 50% off some bars of soap.

That should make it just a few cents. She sniffs at it and smiles at the thought that she might be able to have some nice smelling soap in the bathroom for once. Mimi waits in a long queue at the single checkout. When it's her turn, she anxiously watches as the soap is rung through. To her horror, it comes up as full price.

Mimi feels her face turn bright red, conscious of the long line of shoppers behind her. Her son obediently trots off with the soap while Mimi hands over the cash and tries not to cry.

Just once, she'd like to be able to buy something nice and not worry about the price. But as Mimi struggles through another week on Wall Street, investors are sniffing profits in the air. Dollar stores are booming, reaping major profits on the back of a recession that never really ended for America's poorest. And now, in Manhattan's plush offices and swanky restaurants,

A bidding war is breaking out over Family Dollar. In the dollar store bidding wars, Dollar General has just put up the largest stack of bills yet in an attempt to snatch up competitor Family Dollar. $9.7 billion to be exact. It's a huge number for a business built on the smallest of margins. Billions are being bet on these companies' ability to profit from the nation's neediest. But are these hot stocks built to last?

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You know, it says something when the cost of living crisis gets so bad that even dollar stores are struggling. There are more than $38,000 in variety stores in the U.S. That's compared to just 4,500 Walmarts. But store counts can be misleading. Back in 2024, Walmart stock rose 15%, while dollar stores watched their stock implode and stores get shut down.

Regional chains like the 99 Cents Only store and Bargain Hunt recently went bust. Ten years earlier, investors considered these value retailers sure bets for when times got tough. So what went wrong? How did dollar stores go from Wall Street darlings to the problem children of the stock market? And can the strategies that made them America's most ubiquitous retailers still work in a post-pandemic digital world dominated by rising inflation?

This is Episode 1, Billionaire Tug of War. It's fall 2007, and in Phoenix, Arizona, Michael Calvert is searching the aisles of a Dollar General. He's a partner at the private equity firm KKR, and his anxiety is rising. You can't believe he's lost his companion in a store that's no bigger than two basketball courts.

Calvert spots him near the freezers. This is the man he hopes will fix Dollar General. KKR spent $7 billion to buy the chain last year, and they've been looking for the right CEO ever since. Now, longtime listeners of Business Wars might remember KKR from the Toys R Us versus KB Toys season. They're one of the private equity firms who loaded Toys R Us with debt, leading to its bankruptcy.

KKR specializes in buying underperforming companies in the hope of fixing them quickly for a major profit. And in Dollar General's case, well, they need someone who knows retail inside and out. Calvert's pick is the guy standing by the freezers. His name is Rick Dreiling, a slim, neat man in his 50s with a shock of thick white hair.

Dreiling's not excited about the idea of running Dollar General, but Calbert's convinced him to do a tour of the company's stores anyhow. Dreiling turns to Calbert with a frown. He holds a green Gatorade bottle in his hand. "'Where's the orange-flavored Gatorade? Orange is the number two selling flavor, and there's not even a tag here, so they clearly don't stock it. Why would you stock the number three flavor instead of a number two?'

Calvert looks around for the store manager. Dollar General gives store managers plenty of discretion about what to order. It's possible this store manager simply doesn't like orange Gatorade, but Dreiling has already taken off into another aisle. He points to a clumsy stack of white plastic. "Toilet seats! Unbelievable!" Calvert is mystified. "What about them? When was the last time you bought a toilet seat?"

I don't remember. Long time ago. Exactly. And look at all the space they take up. Space that could be used for goods that actually sell. Calvert can't help but smile. You know, Dreiling seems perfect. Just the kind of man who could turn Dollar General around. When KKR bought Dollar General in 2007, he was struggling. But it wasn't always this way. The first Dollar General opened in 1955 in Springfield, Kentucky.

Its founders, J.L. Turner and his son Cal, owned the local department store. And at the department store, they used to hold dollar days to get rid of excess merchandise. These days proved so popular, the Turners decided it could be an all-year business. They bought excess merchandise from other retailers and sold everything for a dollar. That first store became a sensation. Within the year, they'd opened a second in Memphis. In 10 months, it did more than a million dollars in sales.

And the chain just kept on growing. By 2007, Dollar General had just over 8,000 stores in 35 states. Most were in rural areas where rents were cheap. It was hard for people to get to department stores. The chain no longer sold everything for a dollar, but saw itself as a small box discounter.

Walmart and Target, they're big box discounters. They build huge stores, big boxes, and sell a huge range of items and groceries. But Dollar General builds small boxes. These small stores allow Dollar General to open new stores quicker and locate them closer to where people live. And since the stores were smaller, so too was the choice on the shelves.

Dollar General didn't sell low-profit perishable food items like fresh fruit and vegetables. It sold frozen, canned or dry food. And it was a winning formula. But after years of growth, Dollar General began sputtering. Off the back of a booming economy, shoppers preferred one-stop stores like Walmart. Dollar General's lax inventory management meant favorite items were often out of stock.

Seasonal items that didn't sell got put back on the shelves the following year, instead of being cleared out to make space for new products that might prove more popular. Rising fuel costs, rapid over-expansion, and the neglect of older stores also dragged down profits. All of which led to Dollar General shuttering 400 stores in 2007.

And that's when KKR moved in, convinced that with the right CEO in place, it could resuscitate the chain. A few months after the tour of the Phoenix stores, Rick Dreiling goes to lunch with KKR co-founder George Roberts in California. None of these meetings are ever billed as job interviews, but Dreiling knows the score, and his resistance to taking the job is eroding.

Seeing those stores up close has convinced him that Dollar General is exactly the kind of challenge he wants. But KKR's Roberts wants to be sure Dreiling's resume fits. He's worked at the supermarket chain Safeway and he's doing great work at the New York drugstore chain Duane Reade. But Roberts is less sure that he's a fit for a business whose core customers are people on low incomes in rural areas.

So Roberts asks him a question he asks every person he thinks of hiring. "Rick, on a scale of 1 to 10, how well suited do you think you are to this job?" Dreiling doesn't miss a beat. "On a scale of 1 to 10, I'm a 12." Roberts has never had anyone rate themselves off the charts before. He can't decide if it's arrogance or rock-solid confidence. In the end, he takes the risk. KKR hires Dreiling on a salary of $1 million a year.

A modest salary for someone to run a company this big. But the stock options sweetened the deal, promising Dreiling big returns if he can live up to his 12 out of 10 boast. Dreiling does not waste time. Dollar General is a retailer built on tiny margins. And to thrive, it has to wring out maximum profit and efficiency from every square foot of its stores. Over the next year, store managers lose autonomy over how shelves are stacked,

and where products are displayed. Dreiling opens three prototype stores to test new layouts and ideas. Sales figures are monitored closely. When the numbers show candles sell slowly, he halves their shelf space. He reduces the number of battery suppliers from four to two and pits them against each other in a price war to stay in stores.

Drying also improves the supply of consumables, products that households consume quickly like eggs, milk, toilet paper. These are the items that get customers visiting stores regularly. Once in the store, shoppers then remember they also need to buy other higher profit items like birthday cards or school supplies.

One sip of Dollar General's store brand cola was all Dreiling needed to decide he had to overhaul the company's private label products. The cola was so bad he instantly spat it out. He can't understand why clothing doesn't sell well, so he commissions extensive market research. The study reveals the stores need to stock more men's and children's clothing.

The core customers might be women, but the research found that they buy clothes for their kids first, their husbands next, and themselves last. This rush of change coincides with the 2008 financial crash. The resulting recession drives more people into the arms of dollar stores. And as Dollar General grows, so too does its buying power, which helps it obtain better deals with suppliers.

By 2009, Dollar General is doing so great that KKR decides to cash out earlier than planned. In November 2009, Dreiling rings the bell on the New York Stock Exchange. The moment signals the return of Dollar General to the stock market. Two years earlier, KKR paid $22 a share to buy the company. When KKR sells its last Dollar General share in 2013, the price will have risen to $60.

Dollar General is now a star performer that's making billions for KKR. And that's given KKR's Wall Street rivals severe FOMO. You know, fear of missing out. One of those rivals is Tryon Partners. Remember them from menacing Disney a few seasons back? The folks who bought a load of Disney stock and tried to force out CEO Bob Iger? Well, that's all still in the future for Tryon.

Right now, it's September 2011. Tryon has seen what's happened at Dollar General and how much money KKR made, and it wants a slice of that action. Tryon takes aim at Family Dollar, the number two player in the dollar store market. Family Dollar's always had fewer stores than Dollar General, but in 2006, it had higher sales per square foot. But after Dollar General's dramatic turnaround, Family Dollar slipped behind.

Family Dollar got its start when an ambitious young man named Leon Levine walked into a Dollar General store back in 1959. He was only in his 20s, but had already helped run a department store and co-owned a factory while studying business in his spare time. Levine immediately saw the potential of the concept and left, determined to get into the dollar store business. So he borrows money and opens the first Family Dollar store in his hometown of Charlotte, North Carolina.

As he expands, Levine scouts his locations for new stores by looking for oil stains in nearby parking lots. His theory? If people don't have enough money to maintain their cars, they'll shop wherever products are cheapest. What set Family Dollar apart from Dollar General was where it chose to open stores. Dollar General focused on rural locations where real estate was cheap and competition low.

Family Dollar focused on low-income urban areas. And this strategy worked well for decades. But in the late 2000s, Family Dollar's city focus became a problem. Skyrocketing rents, shabby stores, poor product mix, and increased competition from big box retailers squeezed its profits.

The recession of 2008 and 2009 hid the problems as profits boomed across all dollar stores, but the problems never really went away. And by 2010, Family Dollar had had to slow down new store openings. Its sales per square foot now lagged 35% behind those of Dollar General. But Tryon thinks these problems can be fixed, just like they were at Dollar General.

So it buys 8% of Family Dollar and threatens to stage a hostile takeover if the company doesn't agree to its demands. One of those demands is appointing its choice of President and Chief Operating Officer, Michael Bloom. Like Dreiling, Bloom's also a former drugstore man. He used to work for CVS. Bloom adopts a deep discounting strategy. Deep discounting? It works like this.

Stores raise their core prices but offer huge discounts on selected items each week. The big discounts get people through the door, while the higher core prices boost more profits. It's a strategy that's worked wonders for the drugstore chains. But Bloom and Tryon are about to discover that what works in one type of retailer doesn't always work for another type. And that's going to push Family Dollar into a drastic move.

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April 2013

Howard Levine, the CEO of Family Dollar, walks through Aretsky's Patroon, an upscale eatery in midtown Manhattan. He's in his 50s, and his thin, bespectacled face wears a frown as he enters the private dining room at the back. Ed Garden from Tryon stands up slowly to greet him. The room is tiny, but it's ideal for confidential financial discussions like the one that's about to take place. After they order food...

Garden cuts to the chase. Howard, our view at try-in is the attempt to revive family dollars failed. You're losing customers to Dollar General every day. Levine shifts uncomfortably. He took over from his father, Leon, 16 years ago. Seeing the family business hit choppy waters on his watch weighs heavily. Well, part of that is the strategy of deep discounting. Price promotions don't work with our customers. They need to know how much they'll be spending each week.

Garden shrugs. I agree that your approach hasn't been as successful as we'd hoped. But you're the CEO, Howard. Your store's sales aren't good enough. You're making, what, on average $180 per square foot a year? Well, Dollar General makes $223. I agree we've lost our way. But these things, they take time to turn around. It'll happen quicker if we sell Family Dollar to Dollar General. They know what works. Poor Levine.

The idea of selling the family business is a tough pill to swallow emotionally. But he knows Wall Street investors think he's a mediocre CEO and he's only in place because dad gave him the job. Perhaps the best thing for the company would be a sale. Six months later, in October 2013, Levine finds himself in an elegant meeting room at the historic Hermitage Hotel in Nashville.

Sitting opposite him is Rick Dreiling, the superstar CEO of Dollar General. They're here to discuss a merger of their companies, and Dreiling seems interested. He tells Levine that he's sure that the changes he made at Dollar General would work at Family Dollar. Buying Family Dollar would also help Dollar General break into more urban markets. But Levine's here not just to sell Family Dollar. He's here to ensure it sells for a good price.

So he's been briefed for this negotiation by the team at Tryon. And his instructions are to use his own position as CEO as a bargaining chip. Levine points out that he's younger than Dreiling, so it would make sense for him to be the CEO after the takeover. Dreiling finds that idea ridiculous. He tells Levine that that's a deal breaker. Dollar General is the one buying Family Dollar, remembering his coaching.

Levine shifts his position quickly. He tells Dreiling that he might be prepared to step aside if Dollar General pays a premium for Family Dollar. Dreiling narrows his eyes, but agrees to consider it, just as Levine and Tryon hoped. Levine leaves Nashville with a spring in his step. He feels like a deal is in the offing. Levine spends the next few weeks waiting for a Dollar General call that never comes.

He arranges further meetings. They get cancelled. He leaves messages. They go unanswered. Levine knows when he's being ghosted. He wonders if Dollar General is stringing them along in the hope Family Dollar's stock price will drop even lower and then they can buy it at rock bottom prices. With Dollar General ghosting them, Levine and Tryon go back to the drawing board. They hash out a new strategy to revive the company. Former CVS man Michael Bloom leaves.

The deep discounting price promotions are ditched and 375 worst performing stores get shut. Bloom's downfall is a mini lesson in know your customers. He came from a place where price promotions worked and he had genuine insight about his customers at CVS. But this meant he assumed he also knew family dollar customers.

What he didn't factor in is what the shop stood for in the minds of its customers and their expectation of consistently low pricing. For customers on very tight budgets, well, it's a headache if an essential like toothpaste is very cheap one week but pricey the next. Understanding what really drives customer decisions, that's crucial. Family Dollar hires Morgan Stanley to assess if there are any other buyers out there, but it seems like a long shot.

Dollar General and Family Dollar are far bigger than their rivals. Dollar General is really the only player in the market that could afford to buy Family Dollar. But then, in March 2014, Levine gets an unexpected phone call. It's from a new suitor, Bob Sasser, the CEO of Dollar Tree. Now, Dollar Tree is the distant number three in the dollar store race. It has around 5,000 stores. Family Dollar has over 8,000.

But its business model is very different compared with its bigger rivals. Shopping at Dollar Tree is a bit more like a treasure hunt. Instead of selling cheap everyday essentials, it sells cheap treats. Things like toys, bath bombs, birthday balloons, seasonal items like Valentine's gifts and Mother's Day decorations. And unlike Dollar General and Family Dollar, it still prices everything it sells at a dollar. Of the three, it's the only true dollar store.

And where Dollar General's rural and Family Dollar's urban, Dollar Tree's suburban. Most Dollar Trees are in suburban neighborhoods and shopping malls and seem to draw in a wider, more affluent customer base. But Dollar Tree is worried about the future. Walmart and Target are opening smaller neighborhood stores in suburban areas and trying to lure away their customers. So when Dollar Tree hears Family Dollar is up for sale, it senses a chance to fight back.

Together, Dollar Tree and Family Dollar would have more than 13,000 stores. That's enough to springboard over Dollar General to become the market leader. It would also increase its buying power, helping it squeeze better deals out of suppliers. And it's not just Dollar Tree that's excited about this deal either. For Levine, there's another advantage to selling Family Dollar to Dollar Tree. His lawyers have warned him even if Dollar General bought Family Dollar, the deal would likely be blocked on antitrust grounds.

Family Dollar and Dollar General have the same business models. They often sell the same products and are sometimes located near each other. But Dollar Tree is a different model of business with a smaller overlap, so a merger wouldn't risk being deemed anti-competitive. Levine is excited. He can't help but feel that Dollar Tree is his knight in shining armor. The companies sign a non-disclosure agreement to keep their talks secret until they're ready to announce a deal.

The merger plans take shape quickly. In June 2014, after a two-month whirlwind romance, they are within weeks of announcing their union. June 2014. It's late on a Friday night, and Levine is at Family Dollar's head office in Charlotte, North Carolina. He reads through some of the sale documents, carefully tapping out his comments for the lawyers. Finally, he finishes up with a satisfied smile. The secretive negotiations with Dollar Tree are going so well...

He won't have to work this weekend. He's looking forward to spending it with his family. Maybe even sneaking in around a golf. His phone rings. He doesn't recognize the number. Perhaps it's a Dollar Tree lawyer with a question. This is Howard Levine. Mr. Levine, it's Carl Icahn. Levine's heart sinks. With just five words, his dreams of a relaxed weekend are over. Icahn is a corporate raider. Wall Street's version of the Dementors from Harry Potter.

Icon's the guy who bought the iconic airline TWA and gutted it. He became a half billion dollars richer by turning TWA into a shell drowning in a half a billion dollars of debt. You might also remember him from our Blockbuster vs. Netflix season. He's the investor who killed off Blockbuster's DVD rental service, just as it was about to destroy Netflix. Rumor is he was also the inspiration for Michael Douglas' Greed is Good character Gordon Gekko.

in the 80s film Wall Street, remember? So yeah, if you're Howard Levine and you get a surprise call from Carl Icahn just after the stock market's closed for the weekend, your heart would sink too. And what can I do for you, Mr. Icahn? Well, I just bought 9.4% of your company, Mr. Levine. That makes me one of your biggest shareholders. Why don't you come to Manhattan for dinner with me? Levine resists the urge to swear. This is not an invitation he can refuse.

And Icahn's entering the fray just as he's about to seal the deal with Dollar Tree. At such a delicate stage, this is the worst news he can possibly imagine. If Icahn launches a hostile takeover now, it will blow up his plan to sell to Dollar Tree. And if that happens, Levine will also lose control of the fate of his family's business. You worked hard to lay the foundation for your contracting business.

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June 18, 2014.

Twelve days later, Howard Levine rides the elevator to a penthouse apartment on the 51st floor of a skyscraper in midtown Manhattan. With every floor he glides past, his stomach drops. This past week has been tough. Icon buying into Family Dollar immediately ignited talk across Wall Street of the chain being up for sale. The company's stock has soared, making it more expensive for Dollar Tree to buy. Maybe even too expensive.

The deal he's spent so many hours working on is hanging by a thread. Levine steps into the luxurious penthouse to be met by a butler. "Good evening, Mr. Levine. Please follow me to the balcony." "Uh, sure, thanks." Despite being a rich man, Levine was raised to be frugal. The wealth on display in this penthouse shocks him. He steps out onto the balcony and sees the impressive city views framing icon.

The bearded 78-year-old corporate raider is mixing martinis. "I'm making drinks. What will you have?" "I'd love one, but I'll say no. I need to keep my wits about me tonight." "Not drinking isn't going to help you." Icon grew up poor in Queens, and he's known for his bruising approach to negotiations. Over dinner, Icon tells Levine he needs to sell Family Dollar to Dollar General. It's bigger and better run.

In vain. Levine argues that selling to Dollar General is futile because of the antitrust issues. He tells Icon he hasn't given up hope of reviving his family company. I truly believe that we can turn our fortunes around. A big part of the problem was the misjudged pricing strategy that Michael Bloom brought in. Icon cuts him off. Tell it to your mother. You're not in charge anymore, Howard.

You've let your company become a target, and I'm going to do everything in my power to get a good return on my investment. I'll launch a hostile takeover if I have to." Levine feels helpless and frustrated. Family Dollar's share price jumped after Icon bought his shares. Icon's already made a huge profit on paper, a profit that will get cashed in if Dollar Tree still goes ahead with the buyout. But Icon doesn't know this.

The Dollar Tree talks are still secret. And the non-disclosure agreement Levine signed with Dollar Tree means he can't tell Icon about it. Carl, would you be willing to sign an NDA so we can discuss things more openly? We'd also need you to sign a clause prohibiting you from buying more shares in Family Dollar. Icon narrows his eyes. No, I would not. And if you don't tell me which directors are going to work on the sale to Dollar General, I'll move to fire the entire board.

Levine leaves the penthouse feeling shaken. Icon's hurricane tactics could destroy the sale to Dollar Tree, and there's nothing he can do to stop it. Over the next few weeks, a titanic Wall Street tussle over Family Dollar ensues. Icon brokers another meeting between Levine and Rick Dreiling of Dollar General. But Levine, still hampered by his non-disclosure agreement, can't reveal the rival Dollar Tree bid to either of them.

As a result, Dreiling says Family Dollar's stock price is now too high for Dollar General to consider an offer. Soon after, Dreiling makes a shocking announcement that he'll retire next year. Dreiling's announcement takes even Icahn aback. He knows any new CEO would not contemplate a complex buyout and merger in their first few weeks of work. The chances of Dollar General buying Family Dollar now seem less than zero.

And that gives Levine just enough breathing space to finalize the sale to Dollar Tree. And in July 2014, the merger deal goes public.

The Wall Street Journal tells us about a deal this morning involving dollar stores and a lot of dollars. Discount chain Dollar Tree is buying family dollar stores for about $8.5 billion. The combined company will have more than 13,000 stores in the U.S. and Canada. That's nearly three times as many as Walmart. Now, here's where it gets messy. There are just too many stores with the word dollar in it, right? And they're all going to war. So let's recap here. Dollar General.

It's the biggest and oldest, so let's call it the Big Brother. It's the one Mr. 12 out of 10 CEO Rick Dreiling runs, right? Family Dollar is the second biggest, and it's the one that's in trouble. Think of it as the wayward middle brother and the one Levine is in charge of. That leaves Dollar Tree, the baby brother. It's the third place dollar store and looks nothing like the other two. So, the baby brother, Dollar Tree, wants to buy Family Dollar, the middle brother.

And that news has just made their big brother Dollar General mad. Very mad. You see, Dollar General's board had already decided it should buy Family Dollar, but it made the mistake of thinking it could do that at its leisure. After all, there was no one else with the incentive to bid for it. Or so they thought. Now, Family Dollar is in danger of being stolen from under their noses by Dollar Tree, the baby brother they dismissed.

and two brothers ganging up against their big brother? Well, that suddenly makes them a serious competitive threat to Dollar General. So, Dollar General goes to war. Rick Dreiling cancels his retirement and makes a public offer to buy Family Dollar for $8.9 billion, more than Dollar Tree is offering.

But Family Dollar isn't interested. Its leadership's convinced that a sale to Dollar General will fall foul of antitrust regulations because the two companies are too similar. So Family Dollar sticks with Dollar Tree's offer. And that angers Dreiling even more. He publicly accuses Levine of engineering the sale to Dollar Tree to save his own job as CEO. Dreiling also dismisses the antitrust concerns as a smokescreen.

The battle among dollar retailers just became a little more expensive and threatens to get nasty. Dollar General is raising its already higher offer for Family Dollar to $9.1 billion from $8.95 billion and says it may bypass the board and go directly to shareholders with a hostile takeover if the sweetened deal is panned. But just before shareholders can vote on Dollar General's latest offer, the FTC steps in.

The FTC gets to weigh in on mergers and acquisitions for the United States government. It's the Federal Trade Commission. It fears that if Dollar General buys Family Dollar, the combined company will dominate the market so much it'll reduce competition. So it rules that Dollar General can only buy Family Dollar if it sells 4,000 stores. And that is a deal breaker. Dollar General reluctantly concedes defeat.

And Dollar Tree, the baby brother of the three, gets Family Dollar for $8.5 billion in cash and stock. It's a massive payday for those who engineered the sale. As one of the biggest shareholders in Family Dollar, Levine pockets around $700 million. Tryon Partners, who bounced the company into putting itself up for sale, makes a profit of $400 million.

Icahn sold his shares before the deal went through but still walked away $200 million richer. The deal also transforms the dollar store scene. It's now a two-way battle at the top: Dollar General with almost 12,000 stores versus the combined might of Dollar Tree and Family Dollar with more than 13,000 and to try and stay ahead of one another.

The two rivals start opening more and more stores across the country, sometimes several a day. Suddenly, dollar stores seem to be sprouting up everywhere. And as the number of dollar stores across the country rises, many start to question the impact they're having on communities. In fact, there's like five or six of them at this point in this small area's

A little much. In many places, the influx of dollar stores means local grocery stores can't compete. Many go out of business. At least on a weekly basis, we get emails or calls from some small town saying Dollar General

has been in town and our business has suffered. Dollar General didn't even have to put an announcement in the paper that they were opening a store here. And from that point on, I mean, we just started seeing a drop in sales and we basically have lost 100 customers a day for three years. And soon, it's not just local businesses that have a problem. The dollar store chains don't sell fresh food, so people have to drive miles if they want to buy that.

And many disapprove of dollar stores selling junk food, alcohol and cigarettes in low-income communities, which already suffer the poorest health outcomes in the country. They have a model that is a brilliant model to make quick bucks off the backs of our health. But the expansion of dollar stores just keeps accelerating as the two rivals try to outgrow each other.

By the end of 2017, Dollar General, Family Dollar, and Dollar Tree have nearly 30,000 stores nationwide. That's more than all the Starbucks and McDonald's in America combined. And Americans are now wondering whether the dollar stores are saving hard-hit, poor, and remote communities, or simply sucking them dry. On the next episode, communities and government officials fight back against the proliferation of dollar stores.

Digital newcomers crush prices even lower, and a spike in inflation threatens to upend the dollar store model.

from Wondery. This is episode one of Price Wars, the fall of dollar stores for business wars. If you're interested in hearing more about the fierce battles of America's discount retailers, we recommend the business wars season Target versus Walmart. A quick note about the recreations you've been hearing. In most cases, we can't know exactly what was said. Those scenes are dramatizations, but they're based on historical research. I'm

I'm your host, David Brown. Judy Cooper of Yellow Ant wrote this story. Research by David Walensky. Sound design by Ryan Potesta. Fact-checking by Gabrielle Drolet. Voice acting by Chloe Elmore.

Our managing producer is Desi Blalock. Our senior managing producer is Callum Plews. Our producer is Tristan Donovan of Yellow Ant. Our senior producers are Emily Frost and Dave Schiller. Karen Lowe is our producer emeritus. Our executive producers are Jenny Lauer Beckman and Marshall Louis for Wondery.

In the early hours of December 4th, 2024, CEO Brian Thompson stepped out onto the streets of Midtown Manhattan. This assailant pulls out a weapon and starts firing at him. We're talking about the CEO of the biggest private health insurance corporation in the world. And the suspect... He has been identified as Luigi Nicholas Mangione. ...became one of the most divisive figures in modern criminal history. I was targeted...

premeditated and meant to sow terror. I'm Jesse Weber, host of Luigi, produced by Law & Crime and Twist. This is more than a true crime investigation. We explore a uniquely American moment that could change the country forever. He's awoken the people to a true issue.

Finally, maybe this would lead rich and powerful people to acknowledge the barbaric nature of our health care system. Listen to Law and Crime's Luigi exclusively on Wondery+. You can join Wondery in the Wondery app, Spotify, or Apple Podcasts.