The Dollar Store Surge is Perpetuating Many Poverty Issues

The problem with dollar stores is exactly what they advertise as a benefit; they’re cheap. So cheap, that you have to wonder how they make a profit. Of course, the answer to that is pretty simple as well. Dollar stores can sell products at low prices because they are often low quality.

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The Dollar Store Surge is Perpetuating Many Poverty Issues
Dollar Store Shelf - Editorial Credit: Benoit Daoust / Shutterstock.com

We’ve likely all visited a dollar store at least once in our lives. The Dollar General, Dollar Tree, the now consumed Family Dollar; they’re generally a convenient place to go when you need something of relatively low quality at an equally low price. In fact, most would probably saw that dollar stores are a good thing for that exact reason, but the truth is they are major contributors to the cycle of poverty that many people in the United States live in.

The problem with dollar stores is exactly what they advertise as a benefit; they’re cheap. So cheap, that you have to wonder how they make a profit. Of course, the answer to that is pretty simple as well. Dollar stores can sell products at low prices because they are often low quality. They offer little when it comes to fresh produce, if at all, and healthy living isn’t exactly something you can manage if all of your groceries come from a dollar store.

And unfortunately, dollar stores are cropping up throughout the country at a breakneck pace. Since 2001, the number of outlets for Dollar General and Dollar Tree have risen from 20,000 to 30,000. This number is so large that it exceeds the number of McDonald’s and Walmarts across the entire nation. Moreover, these dollar stores are so widespread that they feed more people than major grocery chains like Whole Foods, which only has 400 outlets nationwide.

On one hand, these dollar stores are presenting a needed resource in communities that are lacking supermarkets and higher quality shopping options, but it is their very presence that continues to perpetuate poverty related issues. For instance, research shows that dollar stores don’t create as many jobs as traditional groceries, generally producing only nine compared to fourteen. Moreover, those jobs are often minimum wage and extremely unfulfilling. It also prompts employees to shop at their own store, but dollar stores aren’t actually always cheaper; comparisons made by economists show that you’re actually paying more for the same weight in goods like raisin and flour at dollar stores than at places like Walmart or Costco.

On top of that, the arrival of a dollar store in a community often has significant impact on other nearby grocery stores. One such example is a dollar store that appeared in Haven, Kansas, thanks to government subsidized tax breaks. Sales at a grocery store nearby quickly dropped by almost thirty percent thanks to their prices being undercut by the new arrival. As stated previously, drawing people away from higher quality grocers isn’t helping their health.

Thankfully, some city governments have realized the overall disadvantages dollar stores offer, and are actively working to keep them out of their area. Many have realized the health problems they present and the race and class stigmas they often embody. Hopefully, city governments will make all the necessary calls to cut back on dollar stores in their area and reinforce good, quality grocers for their communities.

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