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Dollar stores face growing scrutiny



 Dollar stores face growing scrutiny

Copyright 2019 CNN

Dollar stores are popping up all of the lower income communities in the U.S..

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WASHINGTON, D.C.

Dollar stores have never been more popular. – [dollar] sweep across America. Yet a wave of cities and towns have curbed the expansion of dollar and dollar tree, which were bought family dollars in 2015. The companies are the two largest dollar store operators in the country, combining for more than 30,000 stores throughout the United States , from under 20,000 days ago. By comparison, Walmart, America's largest retailer, has 4,700 US stores.

Advocates of tight controls on dollar stores identify the big chains of intentionally cluster multiple stores in low-income areas. Mom-and-pop grocers, critics say.

"The business model for these stores is built on saturation," said Julia McCarthy, a senior policy associate at the nonprofit Center for Science the public interest and a critic of dollar stores.

Opponents also express concerns that dollar stores do not offer fresh produce. Dollar and their products are mostly bottled, drinks, canned foods and vegetables, household supplies and personal care products at rock-bottom prices.

However, Dollar General and Dollar Tree argue that they benefit communities by offering shoppers convenient places

"In rural places without existing grocery stores, having a dollar might be viewed as an asset," said Christopher Merrett, director of the Illinois Institute for Rural Affairs at Western Illinois University. Dollar stores bring in new sales and property tax revenue for cities, create jobs and expand shopping options for customers, he added.

Dollar stores see opportunity to grow even more in America.

Last week, the city council in Birmingham, Alabama, unanimously approved that would prohibit new dollar stores

"Birmingham mayor Randall Woodfin told CNN Business. The new measure will help Birmingham attract and retain grocers in the city's food deserts, he said.

Oklahoma City, Tulsa, Oklahoma, and Mesquite, Texas, have also passed legislation limiting new dollar store openings. And officials in New Orleans, Cleveland, and Fort Worth, Texas, are exploring plans to restrict their businesses to their cities.

"We are disappointed that we have a limited number of policymakers to serve their communities," he said Crystal Ghassemi, spokesperson for Dollar General.

Dollar store growth

Dollar stores have been around for decades. But they have flourished in the United States since the 2008 recession as more Americans were forced to tighten up their spending.

popularity has endured. Wages for a vast number of Americans have grown only modestly.

"While the economy is doing well, our core customer continues to struggle," Dollar General chief executive Todd Vasos told analysts last year. The company's core customers earn $ 40,000 a year or below, $ 20,000 below the median income.

Dollar General caters mainly to low-and-middle-income customers in rural and suburban areas. Dollar Tree targets suburban, middle-income shoppers, while Family Dollar is on lower-income urban and rural customers.

Dollar General looks to build stores in rural areas where a big box retailer or grocery store is located within 15 or 20 miles , Around 75% of dollar general stores are in towns with 20,000 or fewer people, and the chain has its largest footprint in southern states. (Dollar General has more stores in Texas than Costco and Whole Foods do combined nationwide.)

"Dollar general stores often locate at the edge of a rural town, away from the traditional downtown" to draw customers, Merrett said from Western Illinois University. Walmart did 30 years ago. "

Dollar stores can open quickly in new areas because they are smaller and have lower operating costs than grocery stores. Dollar General stores are 7,400 square feet on average, compared to 40,000 square-foot supermarkets. And stores, which employ a lot of workers, are cheap to run.

Mounting opposition

However, "unchecked growth harms local communities."

"Some communities are very serious competitors to their local retail and grocery," said David Procter , director of the Rural Grocery Initiative at Kansas State University.

Family-owned grocery stores operate at razor-thin profit margins and dollar stores. Although most dollar stores do not sell fresh groceries, they offer many of the same household products and daily essentials.

"When the dollar stores take the bulk of that business, it really is hurting their bottom line pretty significantly," he says said.

Burnell Cotlon, owner of the Lower 9th Ward Market in New Orleans, said his Grocery store was closed when Family Dollar opened up in the neighborhood.

"I had to push harder on other items to stay afloat," said Cotlon, who has just become one of the only grocery stores in New Orleans' Lower 9th Ward which was devastated by Hurricane Katrina in 2005.

But the Family Dollar recently closed, which drove customers back to Cotlon's store.

Other local residents and business leaders say that the dollar stores "concentration in urban areas of the grocery store, which offer a wide range of healthy and healthy options, from opening.

"There are almost 100 dollar-type stores in a ten-mile radius," said Fort Worth Councilwoman Kelly Allen Gray. "They are heavily located in low-to-moderate-income neighborhoods, which makes their presence feel predatory."

And Cleveland Councilman Blaine Griffin, who has introduced a moratorium on new dollar store openings, expressed concern that dollar stores do not offer fresh fruits or vegetables.

"A lot of people live in our communities live in deserts," Griffin said. Dollar stores "drive out chains that actually offer good, healthy food options."

Dollar General's produce initiative

Dollar General is trying to fend off criticism that it does not sell healthy or fresh food.

It has added around 125 "better for you" items to its shelves at approximately 3,400 stores. Annie's, Back to Nature and Kashi.

Dollar General has started to offer fruit and vegetables for the first time at 500 stores, too. CEO Vasos said that the US Dollar General General is "driving a tremendous amount of traffic."

But opponents like McCarthy from the Center for Science 15,000 stores.


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