Dollar stores are fastest-growing food retailers, doubling their rural share; N.C. fines biggest chain for overcharging

UPDATE, Jan. 31: North Carolina has fined more Dollar General stores, along with Family Dollar, Circle K, Target, Walmart and 7-Eleven, The Charlotte Observer reports.

Dollar stores are a help for rural families, but consumers need
to be watchful at checkout. (Photo by Bob Bawdy, Tri-City Herald)

Rural town, two-lane road, open swaths of land on either side, some homes, a small post office and . . . a dollar store. Of course, there's a dollar store! Researchers have "found that dollar stores are now the fastest-growing food retailers in the contiguous United States—and have doubled their share in rural areas," reports Tufts University in Boston, where the researchers work. "Households with more purchases at dollar stores also tend to be lower-income and headed by people of color." The study was published Jan. 19 in the American Journal of Public Health.

The study, "which the researchers believe is the first to look at this trend over the past 10 years, could have meaningful implications for nutrition policy. Food and beverages stocked by dollar stores are typically lower in nutrients and higher in calories, while only a small percentage of such shops carry fresh produce and meats," Tufts says. "Their growing footprint, especially in the remote South, is also important: These regions already have higher baseline levels of obesity and food insecurity."

Wenhui Feng, the study's first author, said “Dollar stores play an increasingly important role in household food purchases, yet research on them is lacking. Many localities have established policies such as zoning laws aiming to slow dollar store expansion even though we don’t fully understand the role that they play. Our study is one of the first to use nationally representative data to see the role of dollar stores at the household level.”

The study confirms that rural towns and dollar stores go hand in glove. Researchers Wenhui Feng and Elina T. Page "analyzed how Americans use dollar stores to access food by analyzing food-purchase data from the IRI Consumer Network. The data captured purchases from 2008 until 2020. . . . In general, as people’s income goes up, they spend less of their budget at dollar stores. . . . In rural and low-income areas, people spend on average more than five percent of their food budget at dollar stores.  . . . rural non-Hispanic Black households spend 11.6 percent of their food budgets in dollar stores. Households in the rural South also spend in large numbers."

“The South is a hot spot,” said Sean Cash, food economist and senior author of the study. “The dollar-store business model originated in the South. They have more distribution centers there, and there’s also more consumer demand.”

The chain is not without its problems. North Carolina fined Dollar General Corp. for over-charging customers at the register. In Ohio, Attorney General Dave Yost is seeking a temporary restraining order against the company, reports Kevin P. Curran of Seeking Alpha: "Yost said that the discount retailer has habitually charged higher prices at registers than advertised on shelves. This trend has continued despite his filing of a suit against the chain in November."