Photo by Kenny Eliason on Unsplash
Should Dollar Stores Be Banned in North America?
Across America, many communities are starting to question the impact of dollar stores. Criticisms range from providing low-quality, unhealthy food options to actively blocking the establishment of stores with more nutritious offerings. These stores, abundant across the country, have also raised safety concerns with reported instances of rodent infestations as well as robberies and other crimes.
In 2015, leading health organizations found that 81% of the products tested at dollar stores have one or more toxic chemicals linked to serious health issues like cancer. Even after years of consumer pressure, these major chains are still slow to improve product safety. According to a report from the Ecology Center in 2022, “Of the 226 consumer and food products tested at Dollar Tree, Family Dollar, Dollar General, 99 Cents Only, and Five Below, 53% of the products screened in 2021 contained one or more chemicals of concern.”
Today, companies like SHEIN face tremendous backlash for producing super cheap products in China. Often, such cheap products require terrible labor practices and are low quality, toxic, and harmful to the environment.
Despite these criticisms, dollar stores continue to thrive. With an estimated 249 million Americans living within 5 miles of one, they’re almost as commonplace as McDonald’s. The two largest chains, Dollar General and Dollar Tree, own a total of 35,000 stores, generating $37.8 billion and $28.3 billion in revenue, respectively, in 2022.
The convenience, job creation, and affordability they offer make dollar stores necessary for many people, particularly in low-income communities. While these stores do provide a more accessible shopping option, they often sell nonperishable, highly processed foods, leaving fresh and healthy produce mostly out of the picture. However, Dollar General sells fresh fruits and vegetables in around 3,900 stores and aims to increase that number to 10,000 stores in the coming years.
Starting in 2018, a wave of action began to surge across the United States as towns and cities started pushing back against the rapid proliferation of dollar stores. Around 60 communities — including Tulsa in Oklahoma, Kansas City in Missouri, and Mesquite in Texas — have attempted to restrict the growth with proactive measures such as limiting their locations or outright banning them. They’ve been using zoning bylaws as their weapon of choice, voting to put temporary or permanent restrictions on dollar stores in their areas.
A recent victory came from a community in Louisiana. They managed to halt a dollar store development via a court ruling. The judge in the case ruled that green-lighting the project would be detrimental to the health, safety, and welfare of the residents. This prompted other major cities like Detroit and Chicago to start establishing their own prohibitions.
Furthermore, a community in Stonecrest, Georgia, became the first U.S. city to completely outlaw these stores in an effort to attract more grocery supermarkets.
In another development, residents in Michigan and Nebraska raised their voices against the construction of new Dollar General stores in their neighborhoods. The strong opposition led policymakers to reconsider and ultimately reject the initial plans. However, undeterred, Dollar General’s developers filed lawsuits against these decisions. Faced with the daunting prospect of significant legal expenses, the communities had no option but to back down. As a result, the previously opposed dollar stores are now under construction.
But what about the regular customers? What are their thoughts on banning dollar stores?
The Center for Science in the Public Interest sought to answer this question by conducting the first nationwide survey post-pandemic on the dollar store boom. The study, which was released in October 2023, comprised responses from 750 lower-income dollar store shoppers scattered across the country. The findings revealed that these shoppers relied heavily on dollar stores for their basic necessities and did not desire a ban on them.
Interestingly, 82% of respondents felt that dollar stores had a positive impact on their communities, though 81% also wanted to see healthier food alternatives offered, ranging from fruits to vegetables. However, more inventory could bring more problems.
In one instance, there was a shopper who faced the grim reality of the fresh produce a dollar store had to offer. Picking up a soft, oozing apple, they quickly found that it was not the only item past its prime. The zucchini and spinach were also in a shocking state — spoiled and slimy. This shopper isn’t a passive observer anymore; they’re actively part of a local group in Cascade, Maryland, seeking legal action to prevent the proliferation of dollar stores offering subpar groceries.
These findings suggest that while there’s a case for restricting the expansion of dollar stores, there’s also a need to understand and address the reason for their popularity among many customers, particularly those from low-income households.
Additionally, the limitation of dollar stores doesn’t guarantee the sprouting of grocery stores, which are often courted and require a strategic and targeted approach. The prohibition of dollar stores has, however, sparked creativity in some communities, leading to mobile grocery stores and urban gardening initiatives that provide residents with fresh produce.
The dilemma around dollar stores reveals a broader issue. The situation calls for a reassessment of how corporations impact local communities. While the outright ban of dollar stores isn’t universally feasible or desirable, it’s crucial for communities to have the power to shape their retail landscape and not feel so easily defeated by corporations with access to more monetary resources.
Discussion Questions
Is it possible to strike a balance between the economic advantages of dollar stores and the health detriments they pose, possibly through stronger regulations on product quality? Faced with increased scrutiny, how can business leaders in dollar stores and cheap goods manufacturing pivot toward sustainability and quality without compromising affordability? Considering the discrepancies between the convenience and affordability of dollar stores and the health, safety, and quality concerns outlined, how can retail industry experts and policymakers collaborate to redefine the retail landscape in a way that benefits both businesses and consumers, particularly those living in low-income communities?
Poll
Loading …BrainTrust
Rachelle King
Retail Industry Thought Leader
Dick Seesel
Principal, Retailing In Focus LLC
The market, and not bureaucrats, should decide whether dollar stores are needed or not. And in most cases, the market has already spoken loud and clear in terms of dollar stores, which fill an important need in the shopping habits of many consumers. Sure, there are improvements that could be made and, to be fair, chains like Dollar General are making these by including more fresh products in response to consumer demands and because it enhances their performance and profit. Similar moves are being made in terms of investments in staffing. However, it is important to remember that ultra low prices necessitate simplistic, cost-conscious business models: that’s the trade off. As for competition, there are very few areas where dollar stores are the only game in town. Most rural areas have access to a Walmart or other shops, even if they aren’t quite as convenient or close as dollar stores.
Great point about letting the market, not bureaucrats, decide the fate of dollar stores. While the study shows that 53% of the products screened at dollar stores in 2021 contained one or more chemicals of concern, they don’t compare the results to testing at traditional grocery stores. If comparable products were tested at other stores, I suspect they might have similar findings. Dollar stores serve a purpose for low income consumers and I am not a proponent of government entities dictating store closures or preventing openings. If consumers no longer find the products compelling, the market will dictate the fate of dollar stores.
Thanks, David. That’s so true about testing at other stores. Dollar Stores sell a lot of the same brands and products as are sold in mainstream grocers. Maybe the problem is that there is too much junk in our food, period. But that’s not caused by dollar stores!
A less discerning eye may perceive this article as suggesting dollar stores are a “poor peoples” problem that is infiltrating good communities with bad quality products and high crime. This is hardly the case.
In fact, in 2023, several credible source (Business Insider, Yahoo Finance, WSJ +) reported higher income shoppers (~6 figures) making up most of the new foot traffic in dollar stores. Perhaps, there is more to these stores than unseemly footprints in nice communities?
The reality is, dollar stores serve a purpose as much as Walmart. Some consumers rely on these stores because they simply cannot afford to shop anywhere else. Is the answer really to ban these stores and risk disenfranchising millions of shoppers? Or, can we try to make dollar stores better so the community as a whole can benefit?
For certain, dollar stores have necessary areas of improvement, but fresh produce is not as easy to do as boxes on a shelf (just as Walmart); still, we see Dollar General making the effort. As new locations are negotiated, perhaps local government can ask for improvements like fresh groceries and better quality products where dollar stores can work with communities to help all boats rise.
Most retailers are mindful of the communities they serve and bring programs/resources for those in need but often there is little awareness. For example, Dollar General’s Literacy Foundation is probably underutilized but it can partner with local libraries to champion reading in some communities.
The answer is not ban but better. Dollar stores must be held accountable for their impact in communities they serve and I think they can do better. But, communities need to see the value and accept the reality that for some, all they have are these dollar stores. There has to be a middle ground.
Can a better dollar store still be a dollar store?
It has been my impression that dollar stores served otherwise underserved areas. Consequently, they have been in a position to present an assortment that fits the local market. Until the consumer (Neil Saunders’ “market”) decides to eat more healthfully and make it known that that is what it wants, the product assortment won’t change for the better unless the culture and moral responsibility of the management shifts to offer a better choice. Legislating the change is not the right answer.
Dollar stores are successful because they are dollar stores. They are successful because shoppers want what they offer at the prices they have. If communities don’t want dollar stores, it is easy to put them out of business…don’t shop there. But that is not happening.
Shoppers are choosing to shop in dollar stores in a big way. Do they want unhealthy products? Yes! Do they want cheap products? Yes! Do they care about “health, safety, and quality? No!
There is a place for stores. That place was created by the shopper. The fastest way for Dollar General et al. to put themselves out of business is to upgrade and no longer be a dollar store.
I live in upstate New York. Our small hamlet has 3. The problem is they sell their CPG below a reasonable margin, making it hard to get a larger, full-priced grocery store to enter as they feel they will be cherry-picked for their offerings and lose the margin they need to offset other low prices. Personally, I would love to ban dollar stores for the dismal environment, the unclean floors, and the overworked employees. That said, it is America and the market determines who should rise and fall – even if that means 81% of products contain chemicals or they make it hard to upscale neighborhoods.
As Rachelle King said, “not ban, but better.” Dollar stores are responding to market forces like consumer demand when they determine locations and assortments. Better enforcement of regulations (and actual inspections!) of fresh produce and food safety practices could help mitigate sanitation and freshness concerns, and as quality improves, theoretically anyway, so will demand.
Is this a supply problem that needs to be regulated, or a demand problem whose solution lies at a much deeper level…???
Demand! The people get what they want.
Definitely demand. There is a demand for dollar stores. If people don’t like the choices that create that demand they need to persuade consumers rather than resort to the force of legislation!
What a strange question. If consumers want to go to dollar stores, that’s their right. Do I think there are too many of them? Heck yeah, but I’ve also noticed many are in food deserts. So I’m okay with it. The building department should ding stores for violating health regulations, and I kind f think minimum staff size should be raised, but the number of them is not what I would like my legislators to focus on.
We absolutely should restrict “energy” guzzling cars like oversized, fast, electric cars that rely on unnecessarily large batteries and whose production negatively affects the environment and maybe the people that….wait…Dollar Stores…sorry…yes, Rachelle’s statement sums it all up perfectly: not ban, better! The good news is that consumers won’t have access to “illegal” Dollar Stores but will have access to “legal” drugs. Yes, we should protect consumers that can’t or don’t have the means to protect themselves. Yes, we should allow the market to operate as freely as possible but remember that it needs bumpers. No, contrary to some opinions, Big Macs don’t shove themselves down people’s throats so we must find an unbiased, objective way to effect real change in the way all of us make personal choices. And yes, this is a balance that can be negotiated effectively and we have proven it countless times.
Uh, okay wait a minute. If you think the produce is disgusting, don’t shop there. You can avoid health, safety and quality concerns by shopping somewhere else. If dollar stores embraced high quality, sustainable, whatever, then they probably would not be dollar stores any longer, they would be $20 dollar stores. Then we could decry the lack of places that lower income families had available to them for everyday goods.
You cannot regulate this. You cannot impose bureaucratic will on private enterprise with the goal of making a dollar store Whole Foods but with much lower prices. Well-you can, but it is never successful.
The marketplace — specifically, customer demand — should determine the fate of dollar stores. It’s clear that their growth is spurred by cost-conscious customers — not just so-called “poor” ones — especially during periods of economic stress. Let the consumer decide where to shop, with the caveat that individual communities have the right to apply zoning and other standards to their commercial development.
This is a great example of need outstripping control. It is the responsibility of the retailer as well as the local commerce enforcement structures, the federal government (SEC, FDA, US department of Labor, USDA, EEOC, etc.) to enforce the standards that are already on the books, to ensure that these Dollar stores should reflect a safe, clean, organized, environment for the consumer to enjoy. It is both the retailer’s responsibility and the state, local, and federal government’s authority to ensure that these laws are being followed and not abused. It is the widespread abuse of these laws, that is the true issue here. Demanding conformity with these laws and regulations is what will solve these issues and give the consumer the retail experience they expect (and should expect), regardless of where they shop.
Agreed – if the produce is rotting, cadmium and lead in the packaging and shampoo, and there are pest infestations, then the local, state, and federal health and commerce authorities need to kick up their inspections and enforcement efforts. Likewise, payment and employment terms need enforcement. If that means the dollar store can’t run profitably then they need to raise prices or close – no retailer has the right to operate abusively without regard to public health, safety, or fairness.
Of course dollar stores should not be banned. Make no mistake, shoppers (of all income levels) have responded favorably to this format; overlooking the often disheveled displays, lackluster assortment, uninspiring shopping experiences, and underappreciated staff. Although there remains lots of room for improvement in their operation, oversight to ensure safe products are being stocked, and better working conditions for team members, dollar stores are not going to disappear from our landscape. Nor should they.
Dollar stores are an important part of the retail landscape. That said, there need to be strictly enforced, universalized regulations so that shoppers can count on them as a reliable option.
Plenty of retailers (of all types) sell unhealthy food. And what about sporting events, concerts, carnivals, etc.? I know that the delicious funnel cake I had last week didn’t support my effort to eat healthily. Many items sold at a DG store can be found elsewhere, so I’m not sure why DG is singled out. If a concern over healthy food is an issue, informative signs can be displayed.
This sounds like the same argument against McDonald’s & other organizations wishing to develop a new location. The reasons may vary, e.g., healthy food, increased traffic, neighborhood crime, etc. But basically it is a “not in my neighborhood” mentality. Unfortunately, public officials are often moved by vocal minorities, seeking zoning, permitting, legislation & other blocking or delay mechanisms to dash the development.
The article makes some good observations regarding the downsides of dollar stores. The solution is to address these shortcomings, not ban their important presence in the market. Remember, some consumers need to save money, but everyone likes to save money.
Legislated bans against stores isn’t the answer. Dollar stores aside, if a community really wants clean and reasonably priced grocery stores but is deficient in them, then either there’s not enough population density to support it or elected officials are ignoring something bigger at hand. The issue could be taxation, red tape, rampant theft/crime with no enforcement, a labor pool issue, or other requirements making it difficult or unprofitable to operate a store.
Elected leaders who want to invest in community should be prepared to partner and innovate with a chamber or local groups to brainstorm how they can enable the retail they want to thrive. It could include creation of empowerment zones and investment in infrastructure. It takes work and engagement with many. Most business owners and community leaders will be quick to let politicians know what’s missing and what role the government should have, if any.
Zoning is the way most localities regulate their assortment of retailers. Areas can be zoned by use (car dealers and automotive are often clustered, for example). Some uses are banned (no explosives factories allowed at all, anywhere in X town). Many localities don’t allow clusters of drive-in restaurants. Newark NJ limits the number of check cashing locations. New York City prevents many supermarkets because the number of square feet needed is limited to very few locations.
Does a neighborhood want a supermarket? All they have to do is buy some land and rent it out for $1 a year for 99 years to a well-financed, well-run supermarket operator.
Or build affordable (or subsidized) housing on top of a space reserved for a first-class supermarket operator, and rent the space for 99 years for $1.
I’ve been in multiple rural areas that would be thrilled to have a dollar store, because the population density is so low that the only retailer they have is a gas station.
Excellent comments. I often shop there, despite sloppy and empty shelves in some stores. Because I will save money and the stores give you more bang for the buck. Cheap and good value.
Shoplifting is a problem (despite $1.25 prices) . I suspect that regular retail stores are envious of their success and want to eliminate the competition. I am not sure that healthy products would sell. Junk food should be junky and people love it because it is high in fat, salt, sugar, etc Including me.. So what? Government has no business determining the diets of residents. We don’t need more paternalism from society.