Rapid rise of dollar stores in rural areas offers cheap goods but hurts local businesses

In rural areas across the nation, dollar stores continue to pop up "at a frantic pace, delighting residents with the convenience of big inventories and low prices while threatening local merchants who say they can’t compete," Pam Louwagie reports for the Star Tribune. "In Minnesota, Dollar General opened 42 stores in the past two years, bringing its total to 75. Family Dollar opened 16 stores in Minnesota since September 2014, for a total of 72. Many of the stores are appearing in towns too small for big-box retailers." (Tribune photo by Jim Gehrz: Dollar General in Isle, Minn.)

Nationally, about 6,000 dollar stores have opened since 2010, for a total of nearly 30,000, according to the retail research firm Conlumino, Louwagie writes. "Consumer spending in dollar stores has skyrocketed from around $30.4 billion to $45.3 billion during that time, the firm found. While price remains the top reason customers shop the stores, according to the firm’s surveys, convenience matters, too. More shoppers are also wandering in to browse." 

Advocates for dollar stores say they provide local tax money, while reducing the need for locals to travel out of town to the nearest Walmart, Louwagie writes. Owners of local stores argue that dollar stores have hurt their businesses. Bruce Schelhaas, owner of a grocery store in rural Tracy, said sales are down 10 percent, forcing him cut hours and scrap "a planned $400,000 project to replace all of the store’s freezer and refrigerator cases." He also said his store offers something the dollar stores don't: fresh meat, produce, bakery items and a deli.