A story in the Times Free Press Business section not long ago illustrated the free market’s amazing ability to adapt to meet consumers’ needs, even in tough times.
It’s no mystery that many businesses have laid off workers or shut down altogether in the recession. But discount retailer Dollar General has announced plans to open 600 stores nationwide during the next year, and to create 5,000 jobs in the process. That is on top of 4,000 jobs that Dollar General, based in Goodlettsville, Tenn., outside Nashville, added in 2009.
As the recession has dragged on, more Americans are hunting for bargains. So low-cost outlets such as Dollar General, which keep down overhead by building no-frills stores, can attract a higher share of the market than they might draw during more prosperous times. As a matter of fact, despite the recession, Dollar General’s profits jumped 13 percent in the first nine months of the fiscal year, so obviously the company is meeting many consumers’ needs.
That does not sound the death knell for all higher-price stores, of course. Many will ride out the economic storm by adjusting their own practices and prices to attract customers and meet the challenge posed by their competitors. Then, when times are better and Americans are willing to spend more on luxury goods, those stores, too, may find themselves expanding and hiring more employees.
That is the beneficial ebb and flow of markets rooted in the everyday spending decisions of millions of Americans. Government can never match the efficiency of an economy guided not by subsidies and “stimulus” schemes but by “the invisible hand” of the free market.