Report: Dollar Store Food Sales Hurt the Poor

By Pan Demetrakakes, Senior Editor

Dec 12, 2018

Dollar stores constitute a threat to groceries in poor neighborhoods, and their growth should be regulated, according to an advocacy group for low-income people.

The Institute for Local Self-Reliance issued a report charging that stores like Dollar General, Family Dollar and Dollar Tree undercut regular grocery stores, ultimately to the detriment of residents, who are left with few options to buy fresh food. The report claims that by underselling grocery stores, mostly on shelf-stable staples like canned goods, dollar stores can cause sales at nearby groceries to fall by as much as 30 percent, ultimately driving them out of business.

The report traced how dollar stores tend to proliferate in poor, often African-American, neighborhoods and rural areas. It noted that at close to 30,000, the number of dollar stores in the U.S. exceeded Walmart and McDonald’s outlets combined. Over time, this negatively affects the health of local residents, because few dollar stores sell fresh produce, meat or other fresh goods. The report noted that the major dollar store chains have aggressive expansion plans, and that because of their relatively small size, they often slip through the zoning process with ease.

The Institute for Local Self-Reliance traced the recent passage of a ordinance in Tulsa, Okla., that became the first law in the U.S. to restrict the growth of dollar stores. Championed by a councilwoman from Tulsa’s heavily black north side, the measure mandates that in a areas that meet the USDA definition of a food desert, a new dollar store must be at least one mile away from any existing ones. The report noted that similar measures are under consideration in Mesquite, Texas, and New Orleans.