Communities pushing back against dollar stores opening in their town, report finds

More communities are turning away from the prospect of a dollar store opening up in their town.

In a report published by the Institute for Local Self-Reliance, researchers said more than 70 cities and towns have already blocked new projects from chain dollar stores and 50 cities have enacted laws to limit the discount retailers' plans for expansion.

The three main retailers – Dollar General, Dollar Tree, which also owns and operates Family Dollar – are some of the only retailers left in small towns and in rural areas, according to the report.

"In cities, it is common to find dollar stores clustered by the dozen within certain neighborhoods. In rural towns, they typically locate near the only grocery store, and often succeed in wiping it out," the report said. "One might assume that the dollar chains are simply filling a need, providing basic retail options in cash-strapped communities. But the evidence shows something else. These stores aren’t merely a byproduct of economic distress, they are a cause of it."

Researchers said these tactics leave people without access to fresh food, further imposing hardship on residents who have to travel farther to buy food.

But each store's representatives disagree with the report.

"Dollar Tree and Family Dollar complement grocery stores and bring economic development to every community we enter, including helping to alleviate the effects of 'food deserts' in urban communities by helping serve those who would otherwise be limited in their access to the basic food items we provide," said Kristin Tetreault, chief communications officer at Dollar Tree. "Our stores are on average 9,000 square feet, a small fraction of the size of an average grocery store, and we typically account for less than 2.5% of total food sales in our trade areas."

Dollar General spokesperson Crystal Luce said their stores are often sought to fill the gap in a time when the grocery industry is shifting. And while Dollar General is a general merchandise store, and not a grocery store, they have 3,000 stores that offer fresh produce, and will make that option available to 2,000 more stores in 2023.

What have other communities done to stop dollar stores?

• In New Orleans, the city council asked city planners to limit dollar stores in the city, and to prevent them from clustering in one area and dominating business, with hopes to bring full-service grocers to the area and increase access to healthier foods. 
• In Tulsa, Oklahoma, city council approved a zoning measure to ensure dollar stores are built at least a mile apart.
• In Dekalb County, Georgia, officials started the process in December 2019, to continued to ban the expansion of dollar stores in the area.

No signs of stopping expansion

While each of the dollar stores have faced community pushback, the companies have not indicated any goals of slowing down.

Between 2019 and 2021, Dollar General opened 3,025 new stores, relocated 310 stores and remodeled 4,446 stores, Luce said. For the third quarter of 2022, the retailer reported net sales increased by 11.1% to $9.5 billion.

Dollar Tree, owner of Family Dollar, opened 464 new stores, relocated 120 stores and closed 205 stores in 2022. It also reported a 9% net sales increase of $7.72 billion.

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