Planning for Dollar Stores

Dollar General builds three stores every day. If these trends continue alongside the growth of the other two major brands, there will be as many as 60,000 dollar stores in North America by 2030. These ubiquitous businesses are spreading into urban and rural areas. As major actors in the food system, they both offer and disrupt access to healthy food. Planners have the tools to determine dollar stores' role in food access, shaping the evolution of these brands.

In the review essay "Planning Food and Place: Navigating Dollar Stores to Improve Healthy Food Access" (Journal of the American Planning Association Vol. 90, No. 2), John Accordino and Annie W. Conte offer recommendations for how planners can navigate the challenges of dollar stores to improve food access and maintain community vitality.

Takeaways for Practice:

• Land use policies can guide dollar store placement to key areas, fostering community hubs.
• Encouraging dollar stores to stock fresh food may require incentives or partnerships.
• Planners shape store design and accessibility, ensuring compliance with regulations.
• Supporting independent grocers and implementing fair policies can mitigate displacement.
• Governments analyze food access, offer funding, and adapt policies to address evolving needs.

Planning for Dollar Stores

Planners, rooted in land use planning and regulation, can proactively anticipate dollar store strategies using both traditional and innovative tools. Various methods, such as moratoriums, overlay districts, staple food ordinances, and design regulations, have been employed to regulate or restrict chains like dollar stores. 

Some small cities and towns partner with Dollar General to improve fresh food access. These collaborations, like the performance agreement in Evansville, Indiana, ensure accountability. While not extensively studied, Accordino and Conte argue these partnerships highlight how public policy can shape the evolution of dollar stores.

Business Strategies

Dollar stores primarily target lower-income households with children, serving a growing market segment with minimal competition, mostly from each other. There's debate over whether their presence in low-income areas led to the departure of full-service grocery stores or vice versa.

These stores are strategically located in areas with low real estate values, leveraging algorithms that consider factors like traffic patterns, speed limits, and nearby amenities such as schools and post offices. Typically, they lease rather than buy their sites.

Dollar stores thrive on high-volume sales and low fixed and operating costs. Their profitability stems from minimal expenses, including low wages and small staff sizes. Each store typically employs 5-10 workers, contrasting with independent stores, which often double that number.

Dollar stores predominantly source from low-cost wholesalers and typically do not purchase food from regional or local providers. However, food constitutes a significant and expanding aspect of their business model, with approximately 76% of Dollar General's 2020 fiscal year sales derived from consumable products.

Federal policy mandates that stores accepting Electronic Benefits Transfer payments, utilized by SNAP, WIC, and other food security program recipients, must have coolers for refrigerated foods. Dollar General has embraced this requirement, introducing a distribution initiative and larger storefront models featuring a reported 80% of the fresh produce categories found in traditional grocery stores.

Previous research has noted dollar stores' lack of fresh vegetables, whole-grain products, and healthier food options. However, other surveys indicate their competitiveness in offering healthful dry and frozen goods compared to nearby alternatives. The authors suggest further research to distinguish between types of dollar stores, particularly examining the food offerings in DG Markets.

Top image: Infrogmation of New Orleans