FTC worried that “Dollar Stores” will raise prices … huh?

A few years ago, the FTC was hassling Sirius and XM Satellite Radio when they wanted to merge…. they fretted that a Sirius and XM would jack up subscription rates.

Apparently the FTC hadn’t heard of satellite radio’s main competitor – free, over-the-air broadcast radio,

The FTC pondered the case for so long, that the companies lost millions of dollars The companies finally merged, just in time to get one-upped by other media.

Now the FTC is turning its watchful eyes on the dollar stores.

 

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Here’s the story …

 

According to the WSJ

Dollar General has made several acquisition “overtures” to Family Dollar offering substantial price premiums. All have been rebuffed so far.

Enter Dollar Tree.

“Some analysts believe that Family Dollar wants to be acquired by Tree because their boards and management have gotten chummy.”

Uh-oh, a veritable “love triangle” among the dollar stores …

What’s next?

Federal antitrust regulators may decide which of two corporate suitors is allowed to buy the Family Dollar chain. They already opened an inquiry and have solicited information from the companies.

The WSJ asserts that “if the FTC is perturbed by either a Family-General or a Family-Tree combo, then we have reached a new era of antitrust pointlessness. “

I agree.

First, the dollar stores don’t just compete against each other.

What about uber-efficient retailer like Walmart and Costco?

They tend to keep the lid on prices.

Second, the mere mention of a dollar store jacking up prices has got to make you chuckle.

What would they call themselves, buck-and-a-half stores?

Their whole strategy and reason for being would be blown.

All of this strikes me as pretty silly … and a bad use of my tax dollars.

Let’s see how long the FTC ponders this one.

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One Response to “FTC worried that “Dollar Stores” will raise prices … huh?”

  1. Rob Marshall Says:

    The dollar stores also compete with CVS and Walgreens. The real estate programs at dollar stores, however, are different from those at CVS and Walgreens.

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