Communities Fight Back Against Dollar Stores’ Rampant Growth
Are you one of many shoppers turning to dollar stores in recent years?
Rising inflation has led to rapid growth in dollar store chains — with nearly half of new US stores opened in 2021 being dollar store chains.
The biggest of them all — Dollar General (NYSE:DG) — whose sales and profits have steadily risen — is returning investors 390% vs. the S&P 500’s 160%.
- Opened 3,025 new stores between 2019 and 2021.
- Had plans to add produce into 3K of its 18K+ stores in 2022.
The dark side of dollar stores
A recent report, “The Dollar Store Invasion,” said 70 proposed dollar stores have been rejected since 2019 — highlighting the negative impacts of dollar chains, which:
- Hurts local communities and shuts down independent businesses.
- Leads to higher crime rates and unhealthy food options.
- Pay lower wages and create dangerous working conditions.
One Supervalu grocery store owner estimated a new Dollar General would lower her sales by as much as 20%. Others reported grocers shutting down after dollar stores opened.
Communities are fighting back: City councils are trying to limit or block new stores from opening. Since 2018, at least 54 communities have addedlaws that restrict new dollar stores.
Dollar stores’ rebuttal: Dollar Tree said they take over challenged vacant spaces, help with “food deserts,” and provide affordable and convenient shopping options (NYT).
This is similar to the fear of big retailers wiping out small retailers in the 90s-2000s. But big chains, including Walmart, Target and Costco, thrived in the following decades.