Tuesday, December 23, 2008

End of the dollar store

I am fascinated by the idea of the dollar store. It would not have occurred to me that there would be so many products that one could sell for just $1. Some of the items really do cost a dollar (in other stores); many of them normally cost more, but the ones in a dollar store are junk. There are, however, some really good buys as well. I bought my kids some composition notebooks there; I couldn't even find them in other stores (because it was around the time school started), but there were plenty in the dollar store, and they seem just as good as far as I can tell. One year I also got a little soap dish with decorative soap that I gave out as gifts to people in the office. It is amazing to think that they can sell items for such a small amount and still be profitable. Not only that, but many of them seem to be located in malls, which I would assume means a higher than usual rent that they have to meet.

The thing with dollar stores is that you'd have to think eventually inflation would catch up with them. They've been around for years, and in fact there seem to be more than ever (there are at least three different chains of them around here), but clearly they cannot last indefinitely — and at our usual rate of inflation, I would be surprised if they could last much over ten years. They've already beaten that record, but I think the end is coming: today I went in a dollar store that had aisles with items for $1.10 and for $2. Since I know that this store formerly had everything for a dollar, I figure other dollar stores will be facing the same pressures.

I presume that these stores can continue to operate selling things very cheaply, rather than for precisely $1, but it does seem to take away their major draw. There doesn't seem to be another obvious point around which to base a price theme; is anyone going to be drawn to a "two-dollar" store? Maybe $5, but we are many years from when that will seem as cheap as $1 does now. I wonder about the old five-and-dime stores. Did they really sell everything for 5 or 10 cents? If so, what did they do when prices went up? Was there ever a quarter store? If there were stores like that, they must have died out at some point; will the same thing happen to dollar stores?

Monday, December 22, 2008

Gifts

I read a comment recently by someone who said, "Once you can afford to buy yourself pretty much anything you want under $1000, getting gifts is a lot less fun." This is true to a point, but I think there is more to it. In the last few years, I have come to appreciate the dynamics of gift-giving a lot better.

Obviously, a lot of gifts go to kids. With kids, buying gifts is simple: you buy them something that they want but cannot afford. This is not too difficult, since they want everything, and they have no money to buy it with. With adults, this principle rarely applies. You have to be quite a bit wealthier than someone to buy him something that he cannot afford. The thing is that, if he really wants it, normally he can buy it if he's willing to give up something else. If you really love seafood, you could probably afford to eat it almost every night — provided you were willing to save less for retirement or your kids education, drive an older car, or live in a smaller house in a worse neighbourhood. If it's something you really want, odds are that you will make the sacrifices to get it. The things you absolutely cannot afford are very limited, and so expensive that an ordinary person could not afford to buy them for you, even if he was willing to spend a large amount of money — things like a very fancy car or a better house.

So when you give a gift to an adult, you're not usually buying something he can't afford, but rather something he chooses not to afford. You buy him, in other words, something he would not buy for himself. This is why there is such a big market for novelty items: you wouldn't normally buy something silly for yourself, but it is precisely the sort of thing you would buy for someone else (and for that very reason). Moreover, the economics of gift buying is almost inverted from regular demand, because you don't want to spend too little on a person. If you spend $25 on an item that looks like it is worth only $15, you don't feel bad about it because that extra money is part of what you're sacrificing for the gift receiver; you don't think of it as throwing away money to the merchant. By the same token, if you find a wonderful $25 gift item on sale for $5, you don't necessarily feel that you've saved $20; you feel that you need to get something else so that you're not cheap. Thus my bafflement at going into gift shops and finding completely useless items at inflated prices. It's not illogical, because people don't buy them for themselves. They buy useless items because they want to get something that the gift receiver would not normally buy, and they don't mind spending the money because that is part of the sacrifice. (I'm sure there are many people who do not reason this way — people who like to buy gifts that are on sale. But I think the contrary is more common.)

You don't have to resort to buying worthless gifts, of course, although I admit that I have done so many times myself. The ideal situation is when the person collects something. It's best if the collection is general rather than specific. My dad collects James Bond movies, but I can't buy him one unless I know what he doesn't already have. Also, there are only so many of them, so this gift idea will run out eventually. Thematic collections are better for gifts. A lot of women seem to collect a certain kind of animal, for instance: I've known ones who collect frogs, pigs, cows, buffalo, ducks, and others. Those are great for gifts, because there are always more things to get, and you can find a wide variety of gifts — not only stuffed animals, but calendars, posters, books, etc. Other people have hobbies that can serve a similar purpose: a particular sport, college, type of music, etc. Of course, even the most avid fan of a particular subject may get tired of receiving, say, pig-themed gifts every Christmas and birthday.

My theory is that the best gift should be not only to a particular person, but also from a particular person: in other words, the gift should reflect the interests of both the giver and receiver. Obviously, the most important thing is to give something that a person wants, but if it can also be something that you like or have an interest in, that makes it more personal. I like games, so I like to give games as gifts when I can. Not many people play games as much as I do, but most people play occasionally, and I might be able to find a game on a subject they are interested in. For example, I got my wife a game about the stock market. She likes stocks; I like games. I have to be careful giving games, however, because it might seem self-interested — perhaps I'm giving them because I want to play. That makes them better gifts for people I would never have a chance to play with.

Wednesday, December 10, 2008

Libraries and apples

I had to visit the library of a neighbouring town recently to get a particular book. While I was there, I noticed a sign hanging down from the ceiling that read, "Take the 'search' out of 'research! Use the card catalog." I looked everywhere, and I couldn't find a card catalog; the librarian I asked didn't know of one either. Of course, it's possible that the sign went up before the card catalog was removed, but that seems unlikely to me; most libraries that I know of have been on computer systems for years. I can't recall seeing a card catalog for over a decade. Could someone have put up that sign when there already was no card catalog available to the public?

As I was selecting apples at the grocery store recently, I had to reject quite a few (more than usual) because they had bruises. It's possible that someone will end up with those apples, but it seems more likely that they will end up being thrown out. It made me wonder how much of the cost of apples (and other perishable goods) goes to wastage. The way the apples were stored — basically thrown into boxes for people to root through — seemed ineffective in preserving them. On the other hand, I have to admit that stores that have something like egg crates for apples seem like they're overdoing it, although I understand it better now. I have even seen stores wrap apples up with a piece of cardboard and plastic wrap and sell them in a group. I never liked that idea, but doubtless it saves them money on bruised apples. I wonder just how much money we're talking? With the high price of apples this year, I have been more willing than ever to buy a bag full at a lower price. Whenever I see apples like that, I think the store is trying to pull one over on me by putting bad apples in with the good ones, which probably is part of the reason. Unlike the wrapped apples, those in bags don't get any better treatment than individual apples. It's not just bruises, though; it's also the smaller and less desirable apples.