Cities say the cost of dollar stores – food deserts, crime

Benefit or blight? This question is increasingly playing on the minds of officials in towns and cities across America as they count the cost of the breakneck expansion of discount stores like Dollar General and Dollar Tree.

In February, Chicago became the largest city yet to seek to limit the retailers, with officials deciding that although the stores fulfill a need for families in areas lacking basic retail services, they were also a cause of economic distress.

Critics of these stores, which stayed open during the COVID-19 pandemic to provide essential items and saw swift expansion afterwards, say they attract crime like shoplifting, are often poorly maintained, and push out grocery shops and other businesses.

They also say the stores create “food deserts” where consumers have little access to healthy, fresh produce. Supporters say the so-called small box retailers offer a lifeline to low-income families.

The Chicago measures are just the latest in around 130 restrictions imposed on dollar store expansion in recent years.

Other cities and towns have introduced similar restrictions, or ordered moratoriums on expansion of dollar stores, and some analysts expect this opposition to grow.

“This whole thing has exploded,” said Kennedy Smith, a senior researcher with the Institute for Local Self-Reliance (ILSR), which published a report on the “Dollar Store Invasion” last year.

“As word gets out more about communities that have been successful in controlling dollar store development … others are coming to ask for guidance,” she told the Thomson Reuters Foundation.

As part of new regulations, the Chicago City Council introduced a ban on new dollar stores opening within 1 mile of another outlet owned by the same company.

In its ordinance, it said: “Regulating small box retailers is necessary, desirable, and in the public interest by promoting stronger, more resilient neighborhoods and protecting the public health, safety and welfare of our city.”

Dollar Tree, which includes Family Dollar outlets, and Dollar General have more than 35,000 shops nationwide.

A spokesperson for Dollar Tree said Chicago’s decision meant it and other small box retailers “will essentially be prohibited from opening new or relocated stores” in the city.

The move “will bring more harm than help to the very communities it claims to support by limiting the flexibility to improve stores and provide new offerings to people in these communities,” the spokesperson told the Thomson Reuters Foundation.

The company did not comment on the council’s criticism of its stores’ economic impacts.

The grassroots opposition to dollar stores is just the latest bump in the road for these retailers. Sales have also been hit by competition from Chinese e-commerce platform Temu and other rivals, including Walmart.

Dollar Tree said in March that it planned to close nearly 1,000 of its Family Dollar outlets after poor holiday sales. Discount stores have also struggled with shifts in consumer demand and rising costs.

The closures give communities “an opportunity to re-set the clock and find better ways to ensure that residents have convenient and affordable access to healthy food. With fewer dollar stores, it will be easier for communities to develop or attract better food options,” Ms. Smith said.

But not everyone is happy to see the dollar stores struggle.

The Chicagoland Chamber of Commerce and other business groups said the new rules were “misguided” and would “severely limit opportunities for new economic development in communities where those investments are needed most.”

Stretching budgets

So far, barring the spread of dollar stores has received little consumer pushback, local officials say, in part because the crackdowns are happening mainly in places where many other dollar stores already operate.

And there is evidence that the retailers are responding to a genuine demand.

The first national survey last year by the non-profit Center for Science in the Public Interest found more than 80% of respondents said the stores helped their communities, were convenient, and allowed them to stretch tight budgets.

But nearly 60% of those who did not shop at the stores said this was because of low-quality produce or poor store appearance, while 80% of all respondents said more healthy food options should be stocked.

Broader food access was also highlighted by researchers with UCLA Anderson and the University of Toronto, who found that around one grocery store will close for every three dollar stores that open within a two-mile radius.

This is a driving concern for Rev. Donald Perryman, who runs the Center of Hope church in Toledo, Ohio. His neighborhood was once home to a thriving Black community, he said, but it has endured decades of disinvestment.

“I consider our church to be located at the corner of poverty and pain,” he said. “We were interested to restore a sense of pride in that neighborhood.”

In 2020, Mr. Perryman and other residents got Toledo to put in place a moratorium requiring dollar stores to apply for special permits, but the law lapsed a year later.

Now they are pushing for a full ban, part of a broader effort to link economic development to a push for healthier food options.

“We are presently working on a ‘healthy food zone’ where we can incentivize the bringing-in of healthy food as a safe space, free of … retailers such as dollar stores,” Mr. Perryman said.

Dollar deluge

For Kim Landry Coates, it was the sheer number of dollar stores in Tangipahoa Parish north of New Orleans that fueled her opposition.

“Within five or so miles, there were nine dollar stores,” said Ms. Landry Coates, a former Tangipahoa Parish Council member and now a Louisiana state representative.

When a sign went up announcing plans for a new store, “my phone was ringing off the hook,” she recalled. “‘We have two on the same road within a mile and a half,’ they said. It doesn’t make any sense.”

Last year, the parish’s planning commission denied a developer’s request to build a Dollar General, citing the “health and safety” of residents.

In a petition calling for a ban, people in Tangipahoa said they had been negatively affected by the “saturation” of dollar stores, which they said had increased traffic, affected drainage, diminished small businesses, and attracted litter and crime.

A judge in November upheld the commission’s decision, which is now being appealed. The developer did not respond to a request for comment, and Dollar General did not comment on the case either.

‘Only show in town’

Lorraine Cochran-Johnson, a former commissioner in DeKalb County, Georgia, believes the key to striking a balance between the pros and cons of dollar stores lies in collaboration.

Her county introduced a moratorium on dollar store expansion in 2019 and followed this with a 2022 law creating mandatory distance requirements between the stores, which are most common in poorer African American communities in DeKalb.

“Since that time, we have not had a single dollar store request a land disturbance, permit, or a business license,” said Ms. Cochran-Johnson, who is now running to head the county.

“I’m not against dollar stores,” she said. “I just want it to ensure it doesn’t have a detrimental impact on the communities.”

Ms. Cochran-Johnson drew up legislation to encourage the stores to offer fresh food items, and now many include a cold food section selling milk, cheese, and more, she said.

“They are in a unique position to become a partner. Because often they are the only show in town, I want them to have best practices, so they’re able to meet the needs of the people they serve.”

This story was reported by the Thomson Reuters Foundation.

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