Dollar Stores Are Gutting Small Town Retailers

Drive through many small towns across America these days and you are almost sure to see a dollar store of one brand or other (or multiple stores) at the edge of town along the main drag or on the bypass. While a dollar store may fill a niche in the marketplace by allowing locals to avoid long trips for essentials, unfortunately these national and regional brands can also overpower and decimate the traditional mom and pop stores that have long been the hallmark of the local community.

Dollar stores are to small town (or in some cases tiny town) America what Walmart has been to medium to larger towns/cities and what Amazon* has become to larger urban retail markets. With massive buying power on a national or regional scale, dollar stores can undercut prices of the local grocers, general stores, and other small retailers that struggle to survive the challenges of their small town economies. Here’s an example out of Moville, Iowa on how the arrival of a dollar store can change the dynamics of the town:

“The Moville Record offices are in an old building downtown. The front windows look across Main Street at empty buildings. Moville is only 20 minutes from Sioux City, and most people do their business there. But when Moville lost its last grocery store, locals fought back. Baker says the community donated roughly $600,000 in cash and property to build a new one [on the edge of town]. Then the residents enticed grocery owner Chet Davis, who owns multiple locations in the area, to take over the new store. Davis opened the Moville location of Chet’s Foods, and he says for years business was pretty good.”

“We were doing real well, we were making a profit, and keeping our customers satisfied,” Davis says. “Then in come Dollar General.”

“In 2016, Dollar General built a location a stone’s throw from Davis’ store. Davis says his sales plunged by about 30 percent, initially, and that Dollar General sells some items at a lower price than he can get them for wholesale. He says he will make a decision about closing his Moville location in early 2018.”

Sadly – Chet’s Foods in Moville, Iowa did close. A phone call to the Moville Record newspaper confirmed the store’s closure. They did indicate the town is trying to attract another grocer to fill the void. According to a quote in the NPR story, half of all grocery stores in Iowa closed between 1995 and 2005!

Prototypical Dollar General Store – Source: fremonttribune.com

Far too often, particularly with Dollar General, newer stores (see photo above) are virtually stamped out like an assembly line. All that’s left behind a concrete block and corrugated metal box with few windows and minimal landscaping. These bland and rather impersonal designs have about as much quaint, small town architectural charm as a piece of lumber being slammed against the forehead.

On occasion, dollar stores will occupy an existing vacant space located in or near the center of the town, but most often they will locate on the periphery. If dollar stores were to routinely locate in an area like downtown where they could help fill empty storefronts and build foot traffic for other areas businesses, then perhaps, some of the common objections to them would be less pronounced or cease altogether. But filling these voids in the town’s retail core tend to be the exception rather than the rule.

Given that quite a few of the towns where dollar stores are now locating have fewer than 500 residents, the introduction of such a national chain can dramatically impact the competing main street businesses and often will leave the already struggling retail scene even more gutted. Some might argue that this is just another example of capitalist competition and that those firms who have the best deals should be the ones to survive. But at what cost? Is driving out local retailers and gutting buildings really a value-added service to the community or is just another example of modern-day capitalism run amok?

Source: sanatogapost.com

As planners, what can we do? In large part the answer to that depends on the strength of the local zoning codes. Unfortunately, small town America tends not to be the epicenter of innovative or strict design standards. Those fortunate communities that do have such standards should try to garner some architectural design from the dollar store. Unscientific observations indicate that Family Dollar stores “tend” to more readily incorporate some elements of brick, windows, and/or architectural features into their building design compared to Dollar General, especially in tinier town locations. Dollar Tree generally seems to prefer larger markets than small or tiny town America.

Sadly, at least here in Michigan, another trend this author has seen is that the dollar store will locate just beyond the boundaries of the town/village in an adjacent township. Whether this is done to avoid stricter zoning and design standards, higher taxes, or whatever the rationale, it establishes a poor land use paradigm that can harm the core community while also promoting a smaller-scale version of sprawl.

Dollar General’s growing footprint – Source: marketrealist.com

As dollar stores continue to expand into new markets across the country, communities should update and strengthen their zoning regulations as soon as possible to avoid a mundane structure being imposed upon the local streetscape. For those communities where such a store already exists, all is not lost, as an ordinance update will be beneficial if there are ancillary developments in the vicinity or if the store expands, renovates, or significantly remodels. Updating the master plan and zoning map are important too.

In the end it comes down to what kind of impression a community wishes to portray about itself. Does it wish to look like everywhere else or does it wish to maintain or even enhance its unique identity. This can be a challenging decision, especially in lean times when any form of new development feels like a godsend. The key is to think long term and not just accept the first plan that walks through the door. Often, these are the basic, prototypical designs that lack much in the way of architectural or landscape pleasantries. A clearly written master plan supplementing a form-based or well-articulated zoning ordinance can go a long way towards rebuffing such bland designs long before they ever reach the town offices.

Main Street America is an organization that can provide assistance with preserving and/or revitalizing the heart of your community. In the long run, taking proactive steps such as improving your master plan; updating the zoning code; or working with a local, state, or national preservation organizations, will help make your community become more healthier and more prosperous as a result.

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SOURCES:

• http://mainandlake.com/2016/05/dollar-store-ruined-town-dollar-general-mean-donnelsville/
• https://seekingalpha.com/article/4002812-dollar-general-small-towns-big-business

• http://www.montpelierbridge.com/2014/09/dollar-general-blessing-or-curse/
• https://www.npr.org/2017/12/11/569815331/loving-and-hating-dollar-general-in-rural-america
• https://bismarcktribune.com/dollar-general-creates-worry-in-small-towns/article_5fa289c2-8f2d-5e81-b5aa-dd111bf97e40.html
• https://fremonttribune.com/business/local/dollar-general-makes-impact-in-small-towns/article_44fa7ef7-a65b-585e-820b-b8c5282f6e48.html
• https://sacramento.cbslocal.com/2015/03/10/georgetown-residents-decry-dollar-general-store-changing-look-of-gold-rush-town/
• http://business.time.com/2012/05/14/where-dollar-stores-are-still-not-welcome/
• https://chestertownspy.org/2013/03/07/analysis-growing-us-opposition-to-dollar-stores-playing-out-in-rock-hall/
• https://www.omaha.com/photos-chet-s-foods-tries-to-survive-as-a-small/collection_2b33bb74-c752-11e7-96a2-3bc61a2e06a2.html
• http://www.sekvoice.com/news/20171221/dollar-general-corp-expands-its-rural-niche-sometimes-making-it-too-tight-for-other-retailers