Planet Money: Dollar Stores' Effects On Communities Every day, four new dollar stores will open in the U.S. Dollar stores open in places where few other businesses will go: rural and urban areas. They're threatening businesses that survived Walmart.
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Planet Money: Dollar Stores' Effects On Communities

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Planet Money: Dollar Stores' Effects On Communities

Planet Money: Dollar Stores' Effects On Communities

Planet Money: Dollar Stores' Effects On Communities

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Every day, four new dollar stores will open in the U.S. Dollar stores open in places where few other businesses will go: rural and urban areas. They're threatening businesses that survived Walmart.

STEVE INSKEEP, HOST:

A new dollar store will open up every six hours this year in this country. There are more dollar stores than there are Walmarts and McDonald's combined, according to the Institute for Local Self-Reliance, which is an advocacy group. How do those dollar stores affect a community? Sarah Gonzalez of NPR's Planet Money podcast has more.

SARAH GONZALEZ, BYLINE: There are more than 30,000 dollar stores in the U.S. By comparison, there are about 5,000 Walmarts. And Stacy Mitchell with the Institute for Local Self-Reliance says dollar stores are threatening the small businesses that survived Walmart.

STACY MITCHELL: It's as though they're coming into a compromised ecosystem. It's like an invasive species.

GONZALEZ: Mitchell says dollar stores are oversaturating communities.

MITCHELL: When you're coming into places that are absolutely saturated already with your stores and you decide to open more, I mean, that's a bid to so sort of dominate the local retail scene that no one else can compete with you.

GONZALEZ: The three main dollar store chains turned down requests for a recorded interview. But the dollar store that is growing the fastest - Dollar General - did say that their customers are only willing to travel three to five miles to shop with them, which is why they opened so many stores so close to each other. But in north Tulsa, Okla., city councilwoman Vanessa Hall-Harper says there are too many. There is no place in her district that's more than a mile from another dollar store.

VANESSA HALL-HARPER: Exactly, because they proliferated already.

GONZALEZ: Hall-Harper was elected on a platform promising to bring a grocery store to north Tulsa, which has no grocery store but 11 dollar stores.

HALL-HARPER: And I was saying this has to have an effect on the ability of a grocery store to come in and be successful. Well, it's a couple of councilors that were like, well, there's no studies to show that what you're saying is accurate. I don't need no damn study.

GONZALEZ: Dollar stores are not grocery stores, but they do sell things like cereal and canned food and Twinkies and paper towels - the high-profit items. They don't usually sell fresh fruit or meat or vegetables. You don't make a ton of profit on lettuce and bananas. So Hall-Harper is thinking that if dollar stores are allowed to keep opening up new stores, it won't be worth it to a real grocery store. So she sets out to prevent any new dollar store from opening up - not in all of Tulsa, just in her district.

HALL-HARPER: I was told, this is illegal. You can't do this. You know, we're going to get sued and blah, blah, blah. And I didn't care about being sued as long as we won.

GONZALEZ: But cities do not like to restrict new business.

HALL-HARPER: So I started doing my research.

GONZALEZ: Hall-Harper learns about a city in California - Coronado - that has what's called formula business restrictions.

HALL-HARPER: They had a policy in place that at no time will there ever be more than 10 national chain stores. I don't care if it was a McDonald's, Burger King, whatever.

GONZALEZ: It was a real example of a place restricting business and saying, it's good for us. The proposal before the Tulsa City Council was to limit dollar stores in particular and create incentives for grocery stores and fresh produce. A couple city councilors voted against it.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON #1: Please don't start throwing tomatoes and stuff like that at me, OK?

UNIDENTIFIED PERSON #2: They don't have tomatoes. They would have...

UNIDENTIFIED PERSON #1: Well, don't start throwing Cheetos...

UNIDENTIFIED PERSON #2: ...Packages of Twinkies and stuff.

UNIDENTIFIED PERSON #1: OK. OK. OK. OK.

GONZALEZ: It barely passes 5-4. In effect, no new dollar stores can open up in north Tulsa. Then New Orleans, north St. Louis, Haskins, Ohio - they all called Vanessa Hall-Harper, saying, we think we have too many dollar stores too. Mesquite City, Texas, passed restrictions right away. And north Tulsa is expected to break ground on a grocery store this summer.

Sarah Gonzalez, NPR News, New York.

(SOUNDBITE OF ARMS AND SLEEPERS' "WHICH WAYS (INSTRUMENTAL)")

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