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Dollar stores have boomed during the pandemic, which concerns some communities

SARAH MCCAMMON, HOST:

The popularity of dollar stores has exploded during the pandemic. Research suggests 88% of Americans shop at dollar stores at least sometimes. And about 4 in 10 new store openings in the country this year are for dollar stores. But that proliferation has some communities concerned. Dollar stores have fewer choices for fresh food. And for some neighborhoods, the stores are their only place to shop. Joining us now to talk about it is Brian Vines, a reporter with Consumer Reports.

Hi, Brian.

BRIAN VINES: Hi, thanks for having me.

MCCAMMON: So in your story, you have some pretty astounding statistics about dollar stores' recent growth - more dollar stores than Starbucks and McDonald's. Why are we seeing this almost exponential growth in the number of these stores right now?

VINES: In 1955, a father and son team decided that they'd go into business and sell good stuff to rich people, but they ended up selling, in their own words, the cheap stuff to poor folks. And the rest is history. Those were the founders of Dollar General. And they have a business model that has really met this moment in the sector that's called value retail, where everyone's always looking for a deal.

And as you explained earlier, some people only have that option to engage with these stores in the dollar vein, and others are just discovering them. So they're people from all over the map in terms of socioeconomic levels that are engaging with dollar stores. America loves a bargain.

MCCAMMON: Yeah, and America has always loved a bargain. But as we heard, these numbers have really exploded, particularly during the pandemic.

VINES: That's right.

MCCAMMON: Is there a correlation there?

VINES: Well, one phenomenon that we have noticed is the use of dollar stores by people who are on the higher end of the socioeconomic scale. If you've got a greater income and you discovered dollar stores, for instance, during the pandemic, when you wanted to avoid major grocery stores where you may have shopped in the past, and you saw those long lines, and you didn't want to get in a hazmat suit and wait and go around a 20,000-square-foot grocery store, and you may have driven by or noticed a little 12,000-square-foot space, and you go inside, and there's eggs and milk and some basics and maybe little things that you picked up - and all of the sudden, there's a conversion that happens.

So a store you may not have considered before may become a place where you go in and fill up on some items. In fact, all of the major retailers in this value retail segment - that's Dollar General, Dollar Tree, Family Dollar - say that they're the fill-in store for in between major trips to get groceries. But that fill-in is a fill-up for people who don't have greater options.

MCCAMMON: Brian, you write about your grandmother searching for hidden gems at dollar stores. But I wonder how many of those you can still find today? I mean, what can you really get for a dollar in 2021?

VINES: The dollar stores of my childhood that I visited with my grandmother are a far cry from those three majors that I just spoke about, where you could find oddball things that seemingly fell off a truck. But in today's dollar stores, if you were to walk in particularly those three big ones, you'll see many of the same national retail brands that you'll find at a other grocery store or a big box store. But what may not be familiar to you is the sizes that they come in. They have...

MCCAMMON: Those tiny little tubes of toothpaste.

VINES: Tiny little tubes of toothpaste, smaller than average sizes of breakfast cereal - it's like, honey, I shrank the products. But it's all the brands you know, at sizes that may be a little strange for you.

MCCAMMON: Now, these dollar stores, as we've said, are popping up everywhere. How is that changing the way that Americans shop?

VINES: I like to think that dollar stores are really like a microcosm of America. If you can tell me how you relate to a dollar store, I can draw some inferences about where you live, how much money you make, what you may do by your relationship to dollar stores. Some people see them as a way to run in and snag a quick box of Raisinets or Jujubes before a movie without paying five bucks at the theater. Other folks really depend on them to feed their families and sustain themselves.

So the way that we approach dollar stores really is sort of a story of how Americans are getting by during these times, especially as we hopefully make our way out of this pandemic in a really new world that's emerging in terms of our economic stability and mobility here.

MCCAMMON: But some communities are concerned about the proliferation of these stores. Why?

VINES: Many communities are concerned, particularly those who are low income and have a dearth of other retail options. For instance, in New Orleans East, City Councilmember Cyndi Nguyen made a proposal that was ultimately passed by the Legislature in New Orleans to limit dollar stores from opening within two miles of each other because her community, as her constituents saw it, was being completely saturated because there were so many dollar stores that were essentially, in their view, choking our competition.

We've seen the same thing happen in places, in Alabama and other - Oklahoma was also one of the pioneering places where municipalities drafted legislation to limit the expansion of these dollar stores because when people rely on dollar stores, they don't want them to just take their ball and go home. But they would enjoy a more level playing field that was inclusive of things that the communities demand, like more fresh fruits and vegetable options.

MCCAMMON: Yeah, facing some of this pushback, Dollar Tree and Family Dollar spokesperson says the stores actually help fight food insecurity by, quote, "helping alleviate the effects of food deserts." What do you make of that assertion?

VINES: In Baldwin, Fla., when the local mom and pop grocer closed, the folks in the town were left with two options. There was a truck stop where they could go for prepared food, and there was a dollar store. Seeing that this just wasn't sustainable, the mayor of the town actually, with charter buses - something he said was akin to herding cats to get his seniors on those buses to go 20 miles down the interstate to shop at a full-service grocery store. They created a municipal grocery store, and they break even with selling fresh fruits, vegetables and other things that people need from a supermarket. It changed the life of the town.

In fact, the manager of the Dollar General on the day the supermarket opened said, thank God. We were under so much pressure here from people shopping. And this gives us a release valve that people had an option now to go away. So it makes a difference.

MCCAMMON: That's Brian Vines, reporter for Consumer Reports.

Thank you so much, Brian.

VINES: Thank you.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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