Dollar Store Stocks Fall As Investors Remember The Trucks Do Not Run On Dollars

GOODLETTSVILLE, Tenn.—Shares of Dollar General and Dollar Tree each fell about 6 percent on Friday, a drop analysts traced to an alarming discovery made by investors on Wall Street: the trucks that deliver everything to dollar stores do not run on dollars. They run on diesel, and diesel has been getting expensive.

The slide hit the discount sector hard while the broader market barely moved. Other reports tied the move to warnings that higher diesel costs could squeeze margins at the chains. Neither company had issued fresh news; the stocks simply looked out the window and saw a truck.

"For years the model was beautifully simple," said Garrison Pelfrey, a fictional retail analyst at the firm Clearance & Rack. "Put a store within a short drive of everyone in America and fill it with things that cost very little. The only flaw is the short drive. Someone has to make it, and that someone has a truck."

"You can shrink a candy bar. You cannot shrink a highway."

• The item 38%
• The truck that brought the item 27%
• The shelf the item sits on 19%
• The fluorescent light above the shelf 10%
• Hope 6%

Where A Dollar Goes At A Dollar Store

The item	38%
The truck that brought the item	27%
The shelf the item sits on	19%
The fluorescent light above the shelf	10%
Hope	6%

Source: The Daily SKU Discount Desk; one dollar, followed closely by an intern

Shoppers, who visit dollar stores for exactly the reason that prices there move very little, said they were unbothered by the market's mood. "The stock went down six percent and the bleach is still the same price," said Lorraine Haskett, 63, of Jackson, Miss. "I am not sure what the stock is for."

Investors spent the weekend reassessing the sector with the vigilance of a person who has just checked the price of gas on the way to buy a cheap thing. Some proposed lighter trucks. Others proposed fewer stops. One fund manager suggested the stores move closer to the warehouses, and was gently reminded that the warehouses are the reason the stores are where they are.

Store managers said the news had not changed daily life. "The truck comes when it comes," said one manager in rural Georgia. "We unload it, we put out the seasonal aisle and we wait to find out whether Halloween is already over."

At press time, analysts were recalculating fair value for the sector and, as a hedge, buying a $1.25 calculator.