Proliferation of dollar stores triggers growing opposition
Morgan, Minnesota, a city of about 800 people, has two restaurants, several churches, a grain elevator and one small grocery store that sells rib-eye steaks that, according to the mayor, “are the best around.”
The mayor, Jerry Huiras, 76, is protective of the lone grocery, a family business that dates back many generations and operates in a downtown dotted with empty storefronts. So when he got wind in late 2020 that Dollar General was planning to open a store near the town limits, and that this fast-growing national discount chain was known for undercutting local grocers with its low prices, Huiras vowed to prevent that outcome in Morgan.
Armed with a petition signed by more than 100 people, Huiras was direct in addressing the developer seeking zoning approval to build the Dollar General.
“We just don’t want your store,” Huiras, a Republican, recalled telling him.
Morgan is part of a movement of municipalities across the country that have pushed back against the dollar store industry’s rapid growth.
Since 2019, at least 75 communities have voted down proposed dollar stores, while roughly 50 have enacted moratoriums or other broad limits on dollar store development, according to a new report by the Institute for Local Self-Reliance, an organization that is critical of corporate retailers and their impact on communities.
By comparison, from 2015 to 2018, about 25 communities voted down proposed dollar stores while only six enacted moratoriums or ordinances limiting their growth.
Although the number of blocked stores is much smaller than the thousands that Dollar General and similar chains have opened in recent years, the movement against the industry
has created an unusual group of allies. On many other issues, they disagree, but they are united in their fight against dollar stores.
Rural, Republican-leaning communities in places like southern Virginia and North Carolina are pushing back against dollar stores. And leaders in cities like Toledo, Ohio, and Birmingham, Alabama, have also mounted opposition, saying the stores are fueling crime and unhealthy food choices. In Georgia, 18 cities and towns have restricted their development, according to the think tank’s report.
The stores typically operate with lean staffing, and their employees, by some measures, are paid at the bottom of the retail industry’s scale.
According to a survey by the Economic Policy Institute, a liberal think tank, 92% of Dollar General workers earn less than $15 an hour, lower than many other companies surveyed, including Burger King, Walmart and Dunkin’. About 20% of Dollar General workers earn less than $10 an hour.
And the company is highly profitable.
In December, Dollar General said its quarterly operating profit had increased about 10% from a year earlier while net sales
had increased 11%, to $9.5 billion. Dollar Tree, which also owns the Family Dollar chain, is posting strong results as well.
Last week, Dollar Tree said its profit in fiscal year 2022 increased 23% to $2.2 billion and net sales rose 7.6% to $28.3 billion.
More than one-third of all stores that opened in the United States in 2021 and 2022 were dollar stores. Dollar General opened 2,060 locations during those years, far more than any other retailer, according to Coresight Research.
“As divided as Americans are politically, there’s remarkable agreement that too much of what passes as a legitimate business model is, in fact, fundamentally destructive and unfair,” said Stacy Mitchell, a co-executive director of the Institute for Local Self-Reliance.
Dollar General said it was often filling a void in parts of the country where many retailers did not operate. The company said that 75% of its stores were in towns with fewer than 20,000 people, and that it had been increasing the number of its stores that sell produce.
Dollar Tree said its stores had helped alleviate “food deserts” and revitalize struggling strip malls by providing an affordable and convenient place to shop.