Dollar Stores: Local Business Killer or Convenient Staple?

| February 24, 2020

VENANGO CO., Pa. (EYT) – As dollar chains continue to expand their reach, the discussion over whether the stores enhance or undermine communities is ongoing.

Well-known chain retailers like Dollar General and Dollar Tree, which also bought out Family Dollar four years ago, have continued to expand rapidly in recent years, operating a total of over 30,000 stores across the nation.

These stores have become well-known for opening stores in rural and low-income areas.

David Perdue, Dollar General’s former CEO in the mid-2000s, told The Wall Street Journal that the business’s strategy was to go where Walmart wasn’t going, from suburban areas to rural ones.

This strategy has lead to major growth in recent years, with the chain opening 900 or more stores in 2018 and 2019.

While the chains argue they benefit local communities by offering convenience and low prices, opponents say they discourage supermarkets from opening and threaten existing small businesses.

ExploreVenango.com reached out to some local small businesses to see how they may have been affected.

The owner of one local market, who preferred to remain nameless, said Dollar General and other similar retailers that have expanded in the area have definitely eaten into his business’s bottom line.

“They take a piece of the pie, definitely. As far as putting people out of business, I don’t think they will, but they definitely take some of our profitability. But then again, that leaves you with room to grow, too.”

According to the business owner, it is all about making changes to supply things the other stores don’t have.

“You have to readjust what you’re selling and how you’re selling it.”

He did note one major concern with the retail chains.

“My biggest thing is, they don’t really put back into the community. Support for local baseball, softball, other teams, schools – you don’t see those donations coming from Dollar General.”

The competition from retail chains has hit some small businesses harder than others.

Another local business owner, who preferred to remain nameless, said one of the recently opened Dollar General Stores did hurt her business.

“They do hurt all of the little grocery stores. We just can’t compete with them. They’re buying bulk while we’re just buying singles or maybe cases.”

The business owner noted that in her case, it has hurt the business enough that she may have to consider closing.

“It’s just that bad. The thing that irritates me the most is the fact they put these stores right beside stores that already exist a lot of times.”

There are some small businesses that haven’t seen as much of an effect from the expansion as they expected.

Jim Miller, owner of the Main Street Market, said the opening of the new Dollar General in Polk hasn’t made much of a difference to him.

“The thing is, my business is really more of a meat market. I always keep just a bit of convenience groceries, and while I’ve noticed they hurt me a bit on things like potato chips, what’s bizarre is our meat business has actually picked up.”

Miller said he believes once the weather started to turn colder, some local residents began getting more of their groceries at Dollar General that they had previously traveled out of town to purchase, and then they headed over to his market for their meat and produce.

“I think the ones (businesses) it’s really hurting are the places that don’t have a really good produce, meat, and deli business.”

Miller also noted he feels lucky things have worked out the way they have.

“I’ll be honest, I was really worried about it. You’d be crazy not to. But, they’ve been open long enough now, if I was going to feel an effect, I would have by now.”

In the local community, opinions on the Dollar General chain and similar stores seem to be split and varied.

“I love the dollar stores. I feel I save money shopping in them. Not as big as Walmart and such, which I like. Don’t have to do as much walking to different departments to get everything on my list. This means a lot to me as I’m disabled,” Judy Ehrhart stated.

“I’m so sick of people dogging on these successful businesses! It is not their job to save mom & pop stores or other local businesses. Their one goal is to make money, as it should be. The one goal of all these existing small businesses who boo-hoo when DG comes to town is exactly the same–to make money. Making money is not a bad thing! That’s how it’s supposed to work. Ultimately it is YOU, the consumer, who decides which businesses thrive and survive and which ones do not based on where you spend your money. Don’t like Dollar General? Don’t shop there,” Jessica Kent said.

While there is strong support for the retail giants, some people do have issues with them.

“They help create food deserts. Competition killed smaller stores first by Walmart. If you don’t have a car, you can’t get to the bigger stores or Walmart to get fresh groceries. Poorer people get stuck having only highly processed foods to purchase,” Becky Pic noted.

“Unfortunately, what I did not realize until I started a small business is that the prices these box stores retail their groceries for are often lower than what we have to pay wholesale. This is unfair to the small business. If all businesses could buy their products for the same price Walmart does, just imagine how small local stores could flourish,” Karen Teslovich stated.

“They’re ruining the small businesses, and much of their products are throw away garbage that won’t last long,” MeriBeth Glenn said.

Those who stand opposed to these retailers’ business models have started fighting back in some parts of the nation.

City councils in Birmingham, Alabama; Oklahoma City, Oklahoma; Tulsa, Oklahoma; and Mesquite, Texas, have all passed legislation limiting the opening of new stores.

ExploreVenango.com reached out to the Dollar General Corporation; however, representatives of the company did not immediately respond to requests for comment.


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Category: Local News, News