The Bottom LineThe Bottom Line

Questions Persist as Another Municipality Regulates Dollar Stores

DeKalb County, just outside Atlanta, Georgia, is the latest municipality to ban new dollar stores. But that's only a first step to bring prosperity back to divested neighborhoods.

(Photo by Mike Mozart / CC BY 2.0)

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At one of the Dollar Tree locations on Memorial Drive in metro Atlanta, the parking lot is busy. A steady stream of people enters and leaves the store on a Tuesday around lunchtime. One woman picks up items for her sick son. A man drinks a bottle of tea outside.

This Dollar Tree in Stone Mountain, a suburb east of Atlanta, is a five-minute walk from a Dollar General. It also sits within a few miles of another Dollar Tree, another Dollar General and a Family Dollar, all in DeKalb County. That sort of geography has led the county to pass a moratorium on new dollar stores in unincorporated DeKalb, deciding to extend it on Jan. 28 for another 180 days.

The moratorium has caused controversy among residents.

“It’s not fair because a lot of people can’t afford to go and buy groceries at other stores, and dollar stores are really for this community,” says Faduma Mohamed, who lives in the neighboring city of Clarkston and shops twice a month at dollar stores, including this Dollar Tree. “A lot of people that work [in this community] have low-paying jobs, so they don’t have enough money for groceries.”

DeKalb’s moratorium, which will remain in effect until the end of July at least, came about because of concern from elected officials over dollar stores not providing enough fresh food in neighborhoods with limited grocery store options. The county of more than 756,000 has about 70 dollar stores. During the moratorium, researchers from Georgia State University will study the effects of dollar stores on DeKalb’s crime, property values and economy.

DeKalb County is only the latest local government to pass restrictions on dollar stores. In November, the city of Stonecrest in DeKalb County, passed a total ban on future “small box discount stores,” outlawing businesses under 12,000 square feet that sell most of their goods for $5 or less. The next month, Atlanta restricted dollar stores from locating within a mile of each other in most neighborhoods. Cities across the country — including Tulsa and Oklahoma City, Oklahoma, Fort Worth, Texas, and Birmingham, Alabama — have also passed restrictions on dollar stores.

But questions remain about whether these regulations help communities and lead to better health for residents.

Dollar Tree, Dollar General and Family Dollar all trace their first stores to the 1950s, when $1 had the buying power of about $9 in today’s money. But in the last five to 10 years, dollar stores have proliferated, says Jerry Shannon, a geographer at the University of Georgia.

In 2019, the top three retailers for planned store openings were Dollar General, Dollar Tree and Family Dollar.

“There’s been a lot of attempts over the last 20 years at least for governments to more actively regulate retail environments because of concerns about health,” says Shannon, who researches dollar stores. “In some ways, this is another chapter in that, and I think the lasting kind of impact of that is still being figured out.”

Research hasn’t yet yielded many answers to how dollar stores affect neighborhoods, mostly because scholars and media have only paid attention to dollar stores in the last year, Shannon says. His research began after the Institute for Local Self-Reliance published research in 2018 saying that the nationwide growth of dollar stores is a cause of economic distress. The report piqued Shannon’s interest in the topic.

Some experts and advocates say dollar stores drive out supermarkets and exacerbate food deserts since many do not sell fresh produce. (The Dollar Tree on Memorial Drive doesn’t carry produce, though it offers staples such as rice, dried lentils, pasta, cheese and eggs, plus frozen fruit and vegetables.)

It isn’t clear how the presence of dollar stores factor into grocery stores’ decisions of where to locate, says Beth Racine, professor of public health sciences at the University of North Carolina-Charlotte.

“If you do an analysis of where grocery stores are, you can figure out pretty quickly their strategy for locating where they locate,” Racine says. “I honestly don’t think they take whether a dollar store is there into account as much as they take into account the demographics of the neighborhood.”

Shopping options vary by community. In low-income neighborhoods, convenience stores increased and supermarkets decreased with poverty, according to 2014 research. This was especially true for predominantly black neighborhoods.

In a zoning meeting on Jan. 28 where DeKalb extended its dollar store moratorium, residents who supported the regulation said dollar stores disproportionately affect black neighborhoods, according to the Atlanta Journal-Constitution. About 55 percent of DeKalb residents are black.

“They’re crappy stores and they drag the neighborhood down,” said resident Juanita McCrary-Holmes at the meeting. “We have more than enough… Our communities deserve better.”

Racine says simply restricting dollar stores will not be enough to improve health and food availability in a community.

“It’s not a bad idea to put a moratorium on dollar stores and say, ‘Hey, let’s try to figure this out.’ I just think that you have to kind of look at it from all angles,” she says. “If the politicians think that if they have no dollar stores that the grocery stores will come, I think they’re fooling themselves.”

Politicians and stakeholders should talk with residents who shop at dollar stores about why they do so, Racine says. They also need to study whether grocery store access has been a long-term issue in their neighborhoods over the past 20 years or more.

“If you’re going to put a moratorium on dollar stores, is it because you had a flourishing grocery store there before that then left because they couldn’t handle the competition with the dollar stores, or is it the reverse?” she says. “Is it that there hasn’t been a grocery store there for 20 years and now dollar stores are popping up and you don’t like the looks of that?”

The presence of dollar stores goes beyond issues of food. That’s why governments need to look at how to empower people so they have transportation to access food and enough resources to pay for it in addition to housing and health care, Shannon says.

“All those things are issues that in some ways the dollar stores address, and just regulating and saying you can’t build those doesn’t mean that the need for something like that goes away,” he says. “Some of it is dealing with issues that are outside the food system.”

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter.

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Adina Solomon is a freelance journalist based in Atlanta. She writes on a range of topics with specialties in city design, business and death. Her work has appeared in The Washington Post, CityLab, U.S. News & World Report, and other national and local outlets.

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Tags: atlantafood desertsgrocery stores

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