Dollar General crowding out small, rural stores; company has almost as many stores as McDonald's

Distribution of the 13,601 Dollar General stores in the U.S.
nears that of McDonald's, which has 14,000. (MarketWatch)

Mom-and-pop country stores are being increasingly crowded out by Dollar General stores, reports Jeff Sturgeon of The Roanoke Times. Dollar General Corp. is a $20 billion company with stores across the U.S. that average $1.7 million in annual sales each. Discount chains such as Dollar General and its direct competitors Dollar Tree and Family Dollar are expanding rapidly, especially in rural areas.

Over the last 20 years, Dollar General has refined its rural niche by stocking popular national brands instead of the heavily discounted off-brand items often found at the typical dollar store. "Due to their small size, Dollar General locations can go where Walmart can’t but offer a similar lineup of goods," Sturgeon writes. "The company describes its forte as offering product lines and prices that appeal to people from low- and fixed-income households. Its customers depend on government assistance to such an extent that the company’s sales track changes in food-stamp programs, according to filings with the U.S. Securities and Exchange Commission."

Encroaching Dollar General stores have caused some mom-and-pop businesses to close, since they can't compete with the selection and bulk buying power of the mega-chain. "It's unfair competition," country-store owner Wayne Lamay of Copper Hill, Va., told Sturgeon. He said his customers had promised to stay loyal to his store, but he sees their cars in the Dollar General store parking lot.

Local residents, many of whom live in food deserts, say they like the store's prices, but acknowledge it can be an eyesore. But those who dislike Dollar General are generally powerless to stop it, since the store often takes advantage of lax or absent zoning laws in rural areas to build their stores, reports Sturgeon. Rural county governments usually benefit from new Dollar General stores, since they keep retail dollars in the county that might otherwise happen elsewhere, and pay the government sales and real estate taxes.

Paula and Bruce Smith's view from their home in Copper Hill, Va., has changed.
They don't like it, and worry about pollution from light and heavy delivery trucks.
(Roanoke Times photo by Heather Rousseau)