Forever, it seems, well-meaning busybodies have tried to steer the less affluent to shop in a way that suits wealthy people who think they know what’s best for those pinching pennies. The result has been the demonization of retailers ranging from payday lenders and rent-to-own appliance operations to currency exchanges, convenience stores and corner liquor outlets — not to mention Walmart.
Now comes a predictable backlash against dollar stores, fast-growing retail chains that are getting blamed for figuring out how to operate successfully in depressed rural communities and troubled inner-city locations, as well as more moneyed areas.
A study published this month from the Institute for Local Self-Reliance titled “The Dollar Store Invasion” claims dollar-store chains pose a danger to a community’s well-being. A recent New York Times story strikes a similarly alarmist note, saying a growing number of cities are fighting back against expansion by Dollar Tree and Dollar General, the leading dollar-store companies (Dollar Tree owns Family Dollar, the other big retail brand).
Among the sins being alleged in the “Invasion” report:
— The chains “target disenfranchised areas, especially in hard-hit rural communities as well as Black and Latino neighborhoods in or near urban centers.”
— They “deliberately understaff their stores,” leading to safety violations and violent crime, while paying low wages.
— They “stock no fresh produce and provide deceptively poor value to shoppers, often selling ‘cheater’ sizes of goods —smaller sizes at a higher price per ounce.”
— They also use “predatory tactics” — such as keeping prices low and opening multiple locations — to drive local grocery stores and other retailers out of business.
One thing’s for sure: Where some observers see predators, others see competitors.
At the heart of the complaints is an understandable fear of competition from incumbent businesses that aren’t as sharply run and want local officials to protect them by blocking the expansion of the dollar chains.
The reality is that dollar stores number in the tens of thousands coast-to-coast for good reason. They provide tremendous value to their customers, especially during inflationary times. (Dollar Tree recently addressed inflation by bumping up its traditional $1 price point for nearly all its merchandise to $1.25, while Family Dollar and Dollar General offer more goods at higher prices, though mostly under $10).
It is a folly to criticize the chains for locating in areas underserved by other retailers, as if it would be better to have no stores in those locations, or overpriced, poorly run ones.
Further, a glance at the map shows that the nearly 1,500 dollar stores in Illinois are spread over a reasonably diverse area. In Chicagoland, Dollar Tree’s footprint covers communities ranging from north suburban Northbrook to south suburban Homewood, as opposed to focusing only where poverty and crime are most conspicuous.
The complaints about understaffing and low wages are more credible, but compared to what? While unionized grocery store employees, for instance, typically enjoy good working conditions and pay, that’s not the norm in U.S. retailing. And the dollar chains have stepped up recently to clean up their stores and increase wages.
Dollar Tree, for instance, had to respond to a disgusting scandal involving rats and other vermin at an Arkansas distribution center. Its chief executive departed, replaced by a dollar-store veteran with a strong operational record who has rebuilt the management team and pledged to maintain higher standards. The company is boosting hourly pay by about $2, and rising labor costs continue to put upward pressure on its wage rates.
As for stocking junk food instead of fresh produce, two thoughts: First, stores carry what people want to buy, and while “food deserts” are serious problems, it’s unrealistic to expect dollar stores to be the only solution.
Second, dollar stores already offer staples such as bread and milk, and they are indeed adding more consumables. On a conference call with investors this month, Dollar Tree said it is aggressively expanding the freezers and refrigerators in its stores to offer more pizza, ice cream and other foodstuffs, including goods selling for higher prices than its now-standard $1.25 price point. Its Family Dollar chain similarly is expanding its roster of private-label, affordable foods that, yes, often come in smaller packages to fit the budgets of those who have less to spend. No need to apologize for that.
To the let-them-eat-cake folks who customarily drive their SUVs to buy their organic arugula at Whole Foods, we say, have at it. But don’t complain about those who happily patronize dollar stores.
And if you decide to sneak into your local Dollar Tree to buy party goods, craft supplies or other items that even affluent shoppers recognize as decent deals, we promise not to tell.
An editorial from the Chicago Tribune.