Because the poor get poorer, the rich get richer.
Let’s start with the backdrop: Essentially, the lower-income Americans that are the target customers of dollar stores have gotten too poor to buy anything other than food (a vivid illustration of Piketty’s point about income inequality). That has depressed margins and profits at these [Family Dollar and Dollar Tree] discount retailers.
So the people who own and manage these discount stores are going to end up hurting right? Hahaha, no, remember, the rich get richer.
The fact that these poor Americans—and the retailers that serve them—are doing so badly attracted the attention of some of the richest and best-connected investors in the world. Funds associated with the activist investors Nelson Peltz and Carl Icahn have snapped up significant chunks of Family Dollar in recent months—as has the hedge fund manager John Paulson.
And they have been pushing for a sale. Which makes sense, from their point of view: Combined, they stand to earn hundreds of millions on the deal, at least on paper. ...
Other people that stand to earn a tidy sum on the merger? Well, Family Dollar’s CEO Howard Levine owns roughly 8% of the shares outstanding, so the deal price would land him with paper gains of about $130 million.
So, more and more people have become so poor that they can't afford anything but basic subsistence. So rich people started stores to sell things to those people. And those rich people got richer as the poor people got poorer.
Looks like others have figured out Art Pope's business model.