Discount stores, which include popular franchises like Dollar General, Family Dollar, and Dollar Tree, are making record profits as distressed families seek to save big on everyday household goods and budget-friendly, non-perishable meals.
“In 2019’s boom times, the dollar channel expanded while mid-market chains went bankrupt. Now COVID-19 is making economic disparity irrefutable, to dollar stores’ advantage,” content marketing strategist Lisa Goller explained to Retail Wire.
But budget consciousness conceals the bigger problems these stores create in the communities they claim to serve.
Although store chain executives argue their outlets provide essential goods that can otherwise be challenging to access, that’s not the whole story. Critics argue these stores make food deserts - areas where it’s difficult to obtain affordable, high quality fresh groceries - even worse.
“[Discount stores’] whole strategy is to go to a neighborhood that has a lot of poor people who don’t have access to transportation and can only walk to and from the dollar store,” Charles Bromley of Shaker Square Alliance shared with The Progressive. “The big [grocery] stores, the chains, are pulling out of these neighborhoods.”
The result is the development of “food swamps,” or areas with a lot of dollar stores, corner stores, and fast-food retailers, but no grocery stores or access to healthy meals. Food swamps actually make it even harder for grocery stores to enter, another detriment to struggling communities in desperate need of better options.
"They were not only going into areas where we thought they might push out competition for a grocery store that serves fresh food, but they were also concentrating themselves," says Cliff Keheley, City Manager of Mesquite, TX.
"We had concerns that this type of concentration … would deter [the city] from being able to attract a grocery store in some neighborhoods that have lower income."
Discount stores also thrive in traditionally under-banked communities. They often deal in large amounts of cash, a hazard not just in the fight against the spread of COVID-19, but criminal activity as well.
“The Gun Violence Archive [website] ... lists more than two hundred violent incidents involving guns at Family Dollar or Dollar General stores since the start of 2017, nearly fifty of which resulted in deaths,” wrote Alec MacGillis for the New Yorker.
In times of economic and public health uncertainty, some also argue that these stores provide jobs in under-employed areas. But that’s not the whole story either.
According to the Institute for Local Self-Reliance, “dollar stores also provide fewer and lower quality jobs, often without benefits, than traditional Main Street businesses. Profits are ... not dispersed throughout the community or recirculated in the local economy.”
Which is why labor and worker rights advocates have rallied for years in support of raising the minimum wage to keep pace with inflation and rising costs of living.