February 04, 2019

Food Options in Dollar Store Nation

Todd SchoepflinBy Todd Schoepflin

According to The Institute for Local Self-Reliance, (ILSR) there are 30,000 dollar stores in the United States, more than the number of Walmart and McDonalds locations combined. This blows me away, even though I drive by dollar stores every day, and sporadically go to them to buy items like toothpaste, tape, paper plates, and balloons for special occasions. In my comfortable life in a middle-class suburb located south of Buffalo, dollar stores are an afterthought to me. I breeze by them knowing they exist if I need cheap products, but I don’t think about them as places to buy food.

Unlike Americans who depend on dollar stores for groceries, I’m accustomed to a variety of places offering a plentiful supply of fruits, vegetables, meats, dairy products, snack foods, bakery goods, and other food items. I have the choice between six grocery stores in a five-minute drive (Wegmans, two locations of Tops Friendly Markets, Sav-A-Lot, Aldi, and The Market in the Square). If I extend the drive to ten minutes there’s another Wegmans location and yet another Tops location. In summer months there are also farmers markets close by and one roadside stand at a nearby small farm. As I reflect on all the options that surround me, I think of where I live as an over-served area.

The Market in the Square is a locally owned grocery store located in a plaza where there’s also a Dollar Tree. In the plaza there’s also an establishment that stocks a great selection of meats. For me, it’s options on top of options. Whereas some people live in a food desert (defined by the Centers for Disease Control and Prevention as “areas that lack access to affordable fruits, vegetables, whole grains, low-fat milk, and other foods that make up a full and healthy diet”), I live in a place of food abundance. Residents of a suburb north of Buffalo have even more options than I do, because that’s where the one Whole Foods store and one Trader Joe’s location exist in this region.

Federal meats storeIn contrast, many people who live in lower-income city neighborhoods and rural areas face a different reality. For example, residents in the north side of Tulsa, Oklahoma, have a lack of options when it comes to buying fresh produce and meats. As stated in an article by The Institute for Local Self-Reliance,, there are no grocery stores in North Tulsa, which leave dollar stores as the main places for buying groceries. Dollar General, Family Dollar, and Dollar Tree are concentrated in North Tulsa, which is predominantly populated by African-American residents. Maps in the article show there are fewer dollar stores that exist in predominantly white neighborhoods.

The article gives us important context to consider: the rapid increase in dollar stores exists in an era in which small businesses have already suffered from the challenge of trying to compete with Walmart, which has been a dominant force in the American economy for decades.

That dollar stores are setting up shop at such a rapid-fire pace tells us something significant about our economy. And it’s not good news. Contemplate this quote in the article from a commercial real estate firm researcher named Garrick Brown. “Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America.” The original source of the quote is another incisive article about dollar stores, one that appeared in Bloomberg in 2017, entitled “Dollar General Hits a Gold Mine in Rural America”.

produce display imageIn the Bloomberg article, author Mya Frazier points to the plan for dollar stores to expand in poor rural communities, including places where Walmart stores have closed. One such place discussed in the article is Decatur, Arkansas, where a Walmart Express closed and a Dollar General filled the void. There’s a compelling graphic in the article showing the association between grocery store shopping and factors such as household income and educational attainment. We see, for instance, that people with higher household incomes and bachelor’s degrees prefer to shop at Whole Foods.

Meanwhile, who’s the target market for dollar store customers? One answer comes in the way customers were reportedly described to investors, attributed to a person who was Dollar General’s chief merchandising officer: “Our Best Friends Forever”—an extremely cash-strapped demographic, with a household income less than $35,000, and reliant on government assistance, that shops at Dollar General to “stretch budgets.” More dollar stores are planned for those customers, which means more employees, but most of those employees will have low-wage jobs (the article notes that the relatively few people who work as salaried managers can make about $40,000).

Returning to the The Institute for Local Self-Reliance article, one can see a graphic showing the massive growth of dollar stores in the past decade, and it’s plausible the number of stores will increase to 50,000. But plans for new stores have not gone unchecked. The article discusses the efforts of Vanessa Hall-Harper, a member of the Tulsa City Council, to fight against dollar stores.

Among other actions, she introduced an ordinance to restrict the development of dollar stores in North Tulsa. After consulting Hall-Harper, the city of Mesquite, Texas, passed an ordinance to limit the number of dollar stores. Cliff Keheley, the city manager of Mesquite, sums up Mesquite’s approach this way:

We want to make sure that we provide as many opportunities for grocery stores to develop…We're not against dollar stores. We just feel a concentration, a proliferation, of them would be detrimental to the long-term development of our neighborhoods.

One more uplifting example mentioned in the The Institute for Local Self-Reliance article is The Pennsylvania Fresh Food Financing Initiative, which has helped get loans to local entrepreneurs to open dozens of grocery stores in low-income and moderate-income communities throughout the state. The article concludes this way: “By blocking the spread of dollar stores and fostering the growth of local grocers, cities and towns can begin to close the gap in access to fresh food while also building local power and opportunity.”

I wonder what the future will bring. Will the number of dollar stores reach 50,000 someday? Will they remain a major force, providing cheap items in a manner of convenience to some consumers, and as a limited option to others? Or, perhaps they will eventually lose relevance as behemoth Amazon continues to expand its footprint (Amazon is a blog post topic for another day). For now, in our severely unequal society, one group of shoppers enjoys access to seemingly unlimited food options, while the other group is extremely underserved.

Photos courtesy of the author

Comments

As dollar stores grow increasingly popular, they've become an alternative to America's biggest retailers, including Walmart, Costco, Walgreens, and CVS. In the US, dollar stores are now feeding more people than Whole Foods. Their numbers have surpassed the combined total of Walmart and McDonald's locations.
In 2016, the chain store Dollar General purchased 41 Walmart Express stores that were forced to shut down, despite operating on a similar model.
Her comment seems to sum up the problem: In communities where a dollar store is the closest — and, in some cases,هنا the only — retailer, people can overlook even the most egregious flaws. There's nowhere else to go.

Dollar stores are in every corner. It is more convenient than going to a Walmart that is across town when they have a Dollar store down the street.

I think it's interesting to see the progression of psychology applied to marketing over the decades. It has only become more manipulative over time and I'm sure it won't cease to do so. Learning about the algorithms used on YouTube feels empowering. It gives me a launchpad from which to search out more information. I am trying to be manipulated as a consumer, but I think an inquisitive approach turns fear and shock into an energy that works for me, not for them.

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