On Saturday, Family Dollar temporarily closed 400 stores because a recent FDA inspection of their distribution facility in Arkansas revealed a massive rodent infestation. Here's a video of a worker feeding the rats.
This isn't a surprising story. Dollar Tree, which bought Family Dollar in 2014, relies on razor-thin labor costs to keep their stores profitable.
Workers in these stores are underpaid and overworked. I've been in at least a dozen of these stores across the Western US, from near the Canadian Border in Bellingham, all the way down to Bisbee, a few miles from the Mexican Border, and it's always the same. Each staff member is doing the work of 3 people.
This is a local news coverage about rats at a Family Dollar store in Tennessee back in January. They just don't have enough people working to combat stuff like this.
Nobody's shocked by these rats.
But what's happening with their stock price???
To me, this is where the story gets freaky
At the time of writing, they were topping the list of NYT's daily top gainers, with a gain of more than 5.2% today alone. This is on the first trading day after they had to close 400 stores and recall millions in product.
This is their stock ticker at the moment of writing.
Why did Dollar Tree's stockprice rocket upwards in the middle of an embarassing, and costly RAT CRISIS?
I'm way outside the circle on this, but it seems to be mostly about the fact that their long-time Executive Chairman, Bob Sasser, agreed to step aside on Friday, under pressure from an activist investor. (Sasser isn't actually leaving the board, he's just becoming chairman emeritus. 🙄)
Mantle Ridge is an investment company that likes to pretend they're saving the world 🙄. They own 5.7% of Dollar Tree, and they've been agitating for a change in leadership to strengthen profits. (Dollar Tree recently raised prices from $1 to $1.25.)
Anyways, to make a long story short, the stock price is up more than 5% on the news that the old chairman of the board is out. On the same day that they're dealing with the emergency closure of 400 stores.
Who cares about rats.
It's the old guy's fault. The new guy would never do that. 🙄
When elites fight with elites, which they're always doing lest someone usurp their position, it's the rest of us who lose out.
Like the corporate interests behind NATO and Russia, fighting over control of resources in Ukraine, the Dollar Tree pool-noodle-fight is just another example of what happens when you give a lot of power to a handful of laughably short-sighted idiots. They fight over control of what they have, until, like a racoon washing their cotton candy, the resources they were fighting over are gone.
And what do the rest of us get? Rapid stock growth. And rat infestations. And a continuous failure of the public trust.
The fact that Dollar Tree's stock price is soaring while they're dealing with RATS fits the pattern of Wall Street-as-full-blown-casino. There is little connection between stock prices and the real value being created by companies.
And when Wall Street and Main Street are completely disconnected, things start to get really dangerous. Elites poor decision making becomes even worse.
For 1,000 reasons, this is a dangerous situation.
Rats won't stop people from shopping at Dollar Tree or Family Dollar. Many of their customers don't have a lot of choice.
Dollar Tree (which owns Family Dollar) is competing for market share with Dollar General (both have about 15,000 stores). Both companies have cleverly expanded into rural and urban areas which cannot support full-fledge grocery stores.
These companies are a good long term bet, because rising energy costs and supply chain cholesterol will continue to push food prices through the roof, meaning that ever more Americans will be forced to shop at discount chains, rats or not.
We are being squeezed.
And here's my question:
How tightly do you think they'll squeeze?
At what point do you think the elites in the castle will stop battling each other long enough to hear the howls of pain coming from beyond the walls?
And what do you think they'll do when they finally, and truly hear us?