Month: April 2004

Perhaps you think that dollar stores were a quaint anachronism, surviving only through sales to immigrants. In reality dollar stores are the fastest growing retailers in America. Here are a few facts:

1. More than 4000 new dollar stores have opened in the last three years, an increase of thirty-four percent.

2. The dollar store sector accounts for $16 billion a year, larger than the recorded music industry.

3. Dollar General, a very large chain, will add 625 stores this year.

4. Dollar stores compete on price and convenience, most of all parking and easy access to the goods. The “big box” superstore is proving vulnerable to dollar stores, just as centralized shopping malls are proving vulnerable to the big boxes.

5. Dollar stores offer no frills and spend nothing on marketing.

6. Families earning $70,000 and above are the fastest-growing group of customers for dollar stores. Dollar stores are beginning to lose their dowdy image.

7. Dollar stores are starting to attract name brands on the shelves.

8. Wal-Mart, feeling the competitive heat, is experimenting with “dollar store” sub-sections in some of their superstores.

My take: For me it is all about easy parking. I am starting to get the hang of dollar stores, it is the easiest way to replenish a dwindling supply of toothpaste.

The above facts are from the 10 May issue of Business Week, “Out-Discounting the Discounter.”

1. No new net jobs have been produced in the Swedish private sector since 1950.

2. “None of top 50 companies on the Stockholm stock exchange has been started since 1970.”

3. “…well over 1 million people out of a work force of around four million did not work in 2003 but lived on various kinds of public welfare programs, such as, pre-pension schemes, unemployment benefits, sick-leave programs, etc.”

4. “Sweden has dropped from fourth to 14th place in 2002 among the OECD countries (i.e., affluent industrialized countries) in terms of GDP per capita since 1970.”

Here is a more complete summary. Here is the paper itself. Here is Nils Karlson, the author of the relevant essay. Here is some debate on whether Sweden is richer than Mississippi and Alabama. Admittedly Sweden has a higher quality of public goods and offers more leisure time.

My take: I’m willing to take the Swedish model seriously. I’ve been to Stockholm several times and loved it. That being said, how attractive will this model remain when it offers only half of the per capita income of the United States?

This is a real question, not a rhetorical one. On one hand, freer societies will reap especially high benefits in an era of rapid technological change. On the other hand, the innovations of the United States, and other countries, indirectly subsidize Swedish government spending.

Germany yesterday threw cold water on the festive mood ahead of this week’s European Union enlargement by telling its eastern neighbours that low corporate tax rates used to attract foreign investment were unacceptable.

Speaking only days before 10 new member states join the EU on May 1, most of them from eastern Europe, Chancellor Gerhard Schröder said tax rates, often less than half those in Germany, were “not the way forward” in a united Europe.

Here is the full story. Here is a good article on the European tax cartel.

Germany does have a valid complaint that it sends subsidies to these lower-tax nations. Would any of you care to guess my vision of “the way forward”?

Do you want to be an economics professor? Follow these suggestions, or forward them to your Ph.d. students. Thanks to Craig Newmark for the pointer.

I thought long and hard before choosing the “economics” category heading for this post. So what is an imaginary girlfriend?

This is a service provided by a real life girl where she will pretend to be your long distance girlfriend by sending you personalized love letters, emails, pictures, leave phone messages (if you want), and provide other girlfriend-like services. This relationship appears real to others that may see these things, but it is not. There will be no actual real life meetings or relationship between you and your Imaginary Girlfriend other than that specified in your order.

There is more:

What happens when the time is completed?

When the stated time period is over, you can break up with your Imaginary Girlfriend for any reason you wish. She will write you a final letter begging you to take her back. Of course you can continue your “relationship” by renewing, or start over and find a new Imaginary Girlfriend of your choice!

The suppliers note: “Anyone who has difficulty distinguishing reality from fantasy should NOT use this service.” At the same time, they write: “Perhaps you are wondering what it’s like to have a long distance girlfriend?”

Here are some of the available (imaginary) girlfriends.

Thanks to Rich for the pointer. Maybe some people do this for fun, but I suspect this is one of the more brutal installments of “Markets in Everything.”

Addendum: Let’s outsource this to India!

Second addendum: Rich has an excellent home page.

More and more large department stores are moving out of centralized shopping malls. Consumers prefer big stand-alone boxes.

Why might this be? Consider a few reasons:

1. A stand-alone store has better retail focus. It can target its marketing, direct mail, and advertising more effectively.

2. People like to park right in front of their destination.

3. You go to malls to browse and shop; you go to off-mall stores to actually buy things. Competing entertainment sources have lowered the importance of shopping as a leisure activity.

It is less clear whether a shopping mall is likely further from where you live. On one hand, a mall is probably centrally located. On the other hand, a mall is harder to place because of its size. You can splatter a bunch of Best Buy stores around a suburban area, but you could not do the same for the Mall of America in Minneapolis.

What about good ol’ introspection?: I prefer the big boxes. My reasons are simple. I am a man and I prefer buying to shopping. And I hate parking garages, which are common in malls. I am also willing to let these foibles determine where I shop. By the way, here is a previous MR post on the socialist origins of the shopping mall concept.