I don't see any meaningful risk in higher wages, as there will always be lots
of things that are reasonably cheap and suitable for dollar store inventory.
If all the world's cheapest things get more expensive, there will still
be something that is the cheapest, and that's what they'll sell.

To me the bigger risk is that these firms are basically importers: all
revenue is in USD and the great majority of COGS is in other currencies.
Those other currencies might be pegged to the dollar, but not forever.
A fall in the US dollar is a big risk for them. Same for Walmart.
Admittedly this won't be great for the purchasing power of anybody in the
US so a mitigating factor is that even more people will be forced
to shop at Walmart and dollar stores.

If one is worried about the risk of a crash in the dollar, better
to own Caterpillar than Walmart.


Thanks for the analysis! With regard to the USD, I think the challenge
will only come about if the US will get competitive in producing the
cheap goods and that seems unlikely to me though modern, automated
manufacturing might still prove me wrong.