Communities Push Back Against Dollar Store Boom

More communities are turning away from the prospect of a dollar store opening up in their town.

In a report published by the Institute for Local Self-Reliance, researchers said more than 70 cities and towns have already blocked new projects from chain dollar stores and 50 cities have enacted laws to limit the discount retailers' plans for expansion.

Retail Boom

Last year, nearly half of new stores that opened in the U.S. were chain dollar stores, a degree of momentum with no parallel in the history of the retail industry.

In 2021, there were more of these stores operating than all the Walmarts, CVS, Walgreens,

and Targets combined by a large margin. During the period 2018-2021, roughly half of all

retail stores that opened in the U.S. were dollar stores and these chains were collectively

opening stores at the rate of 3.75 stores a day over the past decade.

The three main retailers – Dollar General, Dollar Tree, which also owns and operates Family Dollar – are some of the only retailers left in small towns and in rural areas, according to the report.

While each of the dollar stores have faced community pushback, the companies have not indicated any goals of slowing down.

Between 2019 and 2021, Dollar General opened 3,025 new stores, relocated 310 stores and remodeled 4,446 stores, Luce said. For the third quarter of 2022, the retailer reported net sales increased by 11.1% to $9.5 billion.

Dollar Tree, owner of Family Dollar, opened 464 new stores, relocated 120 stores and closed 205 stores in 2022. It also reported a 9% net sales increase of $7.72 billion.

Data from Coresight Research indicated that while retailers closed 2,603 locations last year in the U.S. They also opened 5,103 new stores, Retail Dive reported.

According to the news outlet, this was the first time since 2016 that major U.S. retailers actually opened more stores than they shuttered, and there was also a clear type of retailer leading the pack.

Discount chains accounted for most of the openings, with 1,858 new stores overall in 2022. Breaking this down even further, Dollar General and Dollar Tree were the two companies claiming the title for the highest number of store openings out of all retailers. Last year, Dollar General welcomed 1,024 new locations to its portfolio.

This year, Dollar General and Dollar Tree together are on track to open 1,700 new stores. And both report that they have identified many more locations; in the coming years, they plan to grow their combined empires to more than 51,000 outlets.

Dollar General and Dollar Tree (and its subsidiary Family Dollar) single out communities that have been marginalized economically and politically.

A 2022 paper from Berkeley University assessed the impact of dollar store expansion on local food access and economic structures since the Great Recession. Following the recession, several events combined to accelerate the growth of dollar stores. The recession itself may have made low-price, small-format consumables more attractive for many by worsening household finances.

Community Pushback

Since 2019, at least 75 communities have voted down proposals for new dollar stores, according to the report. And more than 50 of those proposed openings occurred between Jan. 2021 and Dec. 2022.

Some cities have even taken things a step further, according to the same report. It found that at least 54 cities and towns—including Birmingham, Alabama; Fort Worth, Texas; Kansas City, Kansas; and Plainview, Nebraska—have actually enacted laws that "sharply restrict new dollar stores," like banning them from opening a new location within one to two miles of an already existing dollar store.

The town of Stonecrest, Georgia, has gone as far as posing a total ban on new dollar stores, the organization stated in the report.

Company spokesperson Kristin Tetreault told Best Life that Dollar Tree and Family Dollar "bring quality products at accessible prices" to many communities around the country, with its stores helping to alleviate "food deserts" where there are few to no nearby grocery options. "We often take over vacant space in neighborhoods and areas that are already challenged, keeping centers and other adjacent businesses open and serving communities, especially those that are underserved," Tetreault said.

Dollar General gave a similar defense, telling Best Life that its stores often fill a void in areas where other retailers have chosen not to serve. "While we are not a grocery store, every Dollar General store offers components of a nutritious meal including canned and frozen vegetables, canned fruits, proteins, grains, dairy, and more," the company said in a statement, adding that it plans to rollout fresh produce to more of its stores in the coming years.