Are dollar stores bad for cities?
Dollar stores may have good prices, but they’re developing a bad reputation.
Customers and municipalities alike are no longer so enamored with the popular retail format, according to Treehugger, which cites a new study about the negative impact dollar stores appear to have on local economies. The study, by the Institute of Local Self Reliance (ILSR), suggests that dollar stores are not only a byproduct, but a cause of economic distress — and a force that perpetuates it. Insurmountable competition among local retailers, low store staff requirements (meaning fewer local jobs), poor and unhealthy food selections and prices that are actually higher than full low-price grocers all contribute to a net negative for cities. In fact Tulsa, OK has taken steps to stop the spread of dollar stores in low-income neighborhoods.
The ILSR study comes amid announcements that, although considered primarily rural phenomenon, one of the biggest dollar store chains in the country is ramping up the pace of its big urban expansion. Dollar General recently announced that it would be opening 13,000 new stores, almost doubling its current store count.
In some cases, Dollar General has even opened in stores spaces once occupied by grocery chains with a reputation for a more full-service offering. In 2016, Dollar General moved into 40 Walmart Express locations vacated when Walmart ended the format.
But not all the news about dollar stores is negative. In all 2,700 of its locations, Dollar General has added 125 “better for you” products to its shelves, according to a report by ABC Action News.
The chain has also begun to build out a small store concept meant to appeal specifically to urban Millennial shoppers called DGX which will presumably have a healthier food selection.
And while last year a New York Times article revealed that in New York the influx of dollar store chains had been negatively impacting the existing mom-and-pop dollar store economy, there was also an apparent upside. The chains seemed to be pushing some independent store owners to up their offerings to better meet community needs and compete with the chains.
- Dollar Store Impacts – Institute of Local Self Reliance (ILSR)
- The dollar store is America’s new invasive species – Treehugger
- Will Dollar General’s DGX concept be a hit with urban Millennials? – RetailWire
- Dollar General grows where Walmart closes – RetailWire
- Dollar General tries to make healthy food more accessible – ABC Action News
- Can indie dollar stores compete with the big chains? – RetailWire
DISCUSSION QUESTIONS: Are dollar stores as bad for cities as opponents claim? What might a dollar store backlash mean for the big dollar store chains and their strategies?