Lower-income American households are running out of money at the end of every month, the discount retailer Dollar General said as it released dismal results that drove its shares down more than 30 per cent for their sharpest one-day drop on record.
When the American economy is too rough for Dollar General…
I think the biggest problem with what you’re saying is that stores are already doing it. What does happen, can happen. If having customers check out their own groceries and pick their own product is so profitable, and the other is not, then why are they doing pickups? On the one hand these retail giants are so smart they’re using the Piggly Wiggly model because it’s the most cost-effective thing but they’re also throwing all that away on apps and online ordering?
Distribution chains already flow from larger warehouses to smaller stores. A store that is a last-mile micro fulfillment center works just fine in the distribution chain. In fact, when you order online they already ship stuff to their stores for your order. They’re already taking things from the larger fulfillment center and moving it to a store. Then an employee gets it ready for you to pickup. They don’t actually have stock of everything listed on their site. They even bounce inventory from store to store.
Walmarts are warehouses. Lowe’s Hardware and Home Depot are warehouses. Sam’s Club, Costco, BJs, etc. They’re not distribution centers but they are warehouses.
It’s a valid point. I would say there are two hypotheses - one is that running fulfillment out of those stores is cost effective. The other is that online ordering is a required customer experience to compete with Amazon despite it being less cost effective.
I think we’re seeing the death of retail, not its transformation. Retail still hold all of this real estate, so they’re trying to make a go of it, but drop shipping from centralized fulfillment centers with robotics and fit-to-purpose infrastructure and technology is going to beat Instacart and gig-economy serfs on a cost basis.
The only reason DG might try to turn a store into a mini-fulfillment center is to liquidate it’s inventory as cheaply as possible and then shutter the place. They are reporting themselves that their customers are literally running out of money. More than likely, when their customers can’t buy, they’ll just shutter the store and pay a Big Lots to just liquidate all the inventory.
All these shops are sitting on dying commercial real estate. That whole market is falling apart. In the end, it’s just gonna be bankruptcy proceedings and consolidations, because no one can make your local dollar general into a fulfillment center without a major capital investment and that’s highly unlikely to turn a profit.
It would be nice if all these spaces could convert to housing. I want to tank home prices from the sheer amount of housing options available…
Oh don’t worry. We can leave it up to the anarchists to turn derelict commercial space into housing.