The Problem With Dollar Stores

Dollar stores are a growing and overlooked source of food for many Americans with lower incomes as they search for ways to stretch their budgets. In fact, consumers who live near these types of stores hold surprisingly positive views about the role those establishments play in their communities, according to a first-of-its-kind national survey of dollar store perception commissioned by the nonprofit Center for Science in the Public Interest (CSPI). The survey found that 82% of respondents said dollar stores helped their communities. Just two corporations, Dollar General and Dollar Tree, which also owns Family Dollar, operate more than 35,000 stores across the country.

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According to CSPI, dollar stores play an especially prominent role in food environments in the South and Midwest regions and in rural communities, Black and Hispanic communities, and communities with limited financial resources. Dollar store shoppers appreciate the convenience of the dollar store experience, citing proximity, store size and quick shopping trips.

However, while the majority of respondents to CSPI’s survey held positive views of dollar stores, they do mention an area that needs improvement. Eighty-one percent indicated that dollar stores should stock more healthy products, and three-quarters (74%) indicated that dollar stores should do more to market healthier options, including placing healthy offerings in prominent places in stores, according to the report. 

Indeed, some consumers avoid shopping at dollar stores due to the lack of healthy options. These non-shoppers can be persuaded, though. CSPI found that roughly half of respondents said they would be more inclined to shop at dollar stores if they discounted fruit and vegetable purchases for participants in the Supplemental Nutrition Assistance Program (SNAP) (53%), added more healthy food options (50%), added more healthy snacks (50%), or had a “healthier choices” food section (46%). 

“Given the negative media reporting surrounding dollar stores, and efforts in some communities to restrict the stores’ spread, we were surprised to find that so many people who live near dollar stores appreciated their convenience and prices,” said Sara John, senior policy scientist at Washington, D.C.-based CSPI. “Yet we also found that the dollar store industry has an opportunity to satisfy current shoppers and attract new shoppers by stocking more healthy food products.”

Policy Levers 

Besides surveying consumers, CSPI funded focus groups, key stakeholder interviews, and in-store environment assessments to inform a set of recommendations for federal and local policymakers, industry, and researchers to help leverage the popularity of dollar stores to create a healthier food environment, including developing a dollar store local model ordinance. 

One of the most impactful federal policy changes that could improve the food environment at dollar stores would be for the U.S. Department of Agriculture to strengthen existing SNAP stocking standards to better align with the Dietary Guidelines for Americans, according to the report. Retailers authorized for SNAP are currently required to stock only a small number of foods – three units of three varieties across four categories, or 36 items total. Stronger, nutrition-promoting SNAP retailer stocking standards would require all retailers that accept SNAP, including dollar stores, to increase the number of healthy food offerings at their stores nationwide. 

[Read more: "Are Dollar Stores a Threat to Traditional Supermarkets?"]

Rather than wait for more federal or local activity, CSPI said that dollar stores can start better serving their communities now. Besides stocking more fruits, vegetables and other healthy foods, dollar stores should prioritize fresh food expansion in areas with lower incomes and limited food access and consider implementing pilot programs that discount fruit and vegetable purchases for SNAP participants. 

Dollar stores could also increase the number of stores authorized to participate in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), especially in areas lacking WIC-authorized retailers. Meeting WIC’s separate stocking standards could improve dollar store shopping for all consumers, not just WIC participants, according to CSPI. Additionally, dollar stores should also take advantage of the federal Healthy Food Financing Initiative (HFFI), which makes investments to improve access to healthy foods in underserved areas, noted the group. By applying for HFFI funding, dollar stores would add additional refrigeration equipment or make other investments necessary to accommodate more healthy food items. 

“Dollar stores might not be for everyone, but it is undeniable, for better or worse, that they are a growing and overlooked source of food for many Americans, especially those who live in areas with limited other food retail options,” John said. “Consumers who shop at dollar stores don’t want them to go away, but they do want them to be better neighbors nutritionally for the benefit of themselves and their families. Congress, USDA and local communities can help point the industry in the right direction.”