The Dollar Store Invasion: Examining the Impact on Communities

Across America, rural communities and big cities are limiting the expansion of dollar stores, whose illegal predatory tactics, labor abuse, and monopoly consolidation destroy the few community grocery stores that survived the Walmart plague and create #FoodDeserts. 1/ pic.twitter.com/goqVfpoRSM

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on https://t.co/iSBh8sqXw0, my surveillance-free, ad-free, tracker-free blog:https://t.co/2JDcFulvMC 2/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

"The Dollar Store Invasion," is a new @ILSR report by @stacyfmitchell, Kennedy Smith and @SusanRHolmberg. https://t.co/vDBBP0ulgx 3/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

It paints a detailed, infuriating portrait of the dollar store playback, and sets out a roadmap of tactics that work and have been proven in dozens of places, rural and urban: 4/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

"Dollar stores drive grocery stores and other retailers out of business, leave more people without access to fresh food, extract wealth from local economies, sow crime and violence, and further erode the prospects of the communities they target." 5/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

This new report builds on ILSR's longstanding and excellent case-studies, augmenting them with the work of academic geographers who are just starting to literally map out the dollar store playbook. 6/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

It identifies the way that a dollar stores will target, say, the last grocery store in a Black neighborhood and literally surround it, like hyenas cornering weakened prey. 7/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

This tactic is repeated whenever a new grocer opens in the neighborhood: dollar stores "carpet bomb" the surrounding blocks, ensuring that the new store closes as quickly as it opens. 8/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

One important observation is the relationship between these precarious neighborhood grocers and Walmart and its other big-box competitors. 9/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Deregulation allowed Walmart to ring cities with stores that relied on "predatory buying" (wholesale terms allowing Walmart to sell goods cheaper than its competitors bought them, rendering its suppliers brittle and sickly, forcing down the wages of those suppliers' workers). 10/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

This was the high cost of low prices: neighborhoods lost local grocers, community dollars ceased to circulate, flowing to Walmart's billionaire owners, who spent it on union busting and political campaigns for far-right causes, like defunding of public schools. 11/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

This is the landscape where the dollar stores took root: a nation already sickened by an apex predator, which left a productive niche for jackals to pick off the weakened survivors. 12/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

#WallStreet loved the look of this: the #PrivateEquity giant KKR took over #DollarGeneral in 2007 and went on a acquisition and expansion bonanza. 13/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Even after KKR formally divested itself of Dollar General, the company's hit-man #MichaelMCalbert stayed on the board, rising to chairman. 14/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

The dollar store market is a duopoly. Dollar General's rival is #DollarTree, another gelatinous cube of a company that grew by absorbing many of its competitors, using Wall Street's money. 15/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

These acquisitions are now notorious for the weaknesses they exposed in #antitrust practice. For example, when Dollar Tree bought #FamilyDollar, growing to 14,000 stores, the @FTC waved the merger through on condition that the new business sell off 330 of them. 16/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

These ineffectual and pointless merger conditions are emblematic of the inadequacy of antitrust as it was practiced from the Reagan administration until the sea-change under Biden, and Dollar Tree/Family Dollar is the poster child for more muscular enforcement. 17/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

The duopoly has only grown since then. Today, Dollar General and Dollar Tree have more than 34,000 US outlets - more than #Starbucks, #Walmart, #McDonalds and #Target - *combined*.

Destroying a community's grocery store rips out its heart. 18/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Neighborhoods without access to groceries impose a tax on their already-struggling residents, forcing them to spend hours traveling to more affluent places, or living off the highly processed, deceptively priced (more on this later) goods for sale on the dollar store shelves. 19/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Take #Cleveland, once served by a small family chain called #DavesMarket that had served its communities since the 1920s. 20/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Dave's store in the Collinwood neighborhood was targeted by Family Dollar and Dollar General, which opened *seven* stores within two miles of the Dave's outlet. 21/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

The dollar stores targeted the only profitable part of Dave's business - the packaged goods (fresh produce is a money-loser, subsidized by packaged good). 22/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

The dollar stores used a mix of predatory buying and "cheater sizes" (packaged goods that are 10-20% smaller than those sold in regular outlets, which are not available to other retailers) to sell goods at prices that Dave's couldn't match, driving Dave's out of business. 23/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Typical dollar stores stock no fresh produce or meat. If your only grocer is a dollar store, your only groceries are highly processed, packaged foods. 24/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

These are often sold in deceptive single-serving sizes that actually cost *more* per ounce than the products that the defunct neighborhood grocer once sold.

Dollar stores don't just target existing food deserts - they *create* them. 25/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Dollar stores target Black and brown neighborhoods with a single grocer and then they use predatory pricing (subsidizing the cost of goods and selling them at a loss) and predatory buying to force that grocery store under and tip the neighborhood into food desert status. 26/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Dollar stores don't just target Black and brown urban centers; they also go after rural communities. 27/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

The commonality here is that both places are likely to be served by independent grocers, not chains, and these indies can't afford a pricing war with the Wall Street-backed dollar store duopoly. 28/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

As mentioned the "predatory buying" of dollar stores is illegal - it was outlawed in 1936 under the #RobinsonPatmanAct, which required wholesalers to offer goods to all merchants on the same terms. 29/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

40 years ago, we stopped enforcing those laws, leading the rise and rise of big box stores and the destruction of the American Main Street.

The lawmakers who passed Robinson-Patman knew what they were doing. 30/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

They were aware of what contemporary economists call "the #WaterbedEffect," where wholesalers cover the losses from their massive discounts to major retailers by hiking prices on smaller stores, making them even less competitive and driving more market consolidation. 31/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

When dollar stores invade your town or neighborhood, they don't just destroy the food choices, they also come for neighborhood jobs. Where a community grocer typically employs 12 or more people, Dollar General employs about 8 per store. 32/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Those workers are paid less, too: 92% of Dollar General's workers earn less than $15/h, making Dollar General the worst employer of the 66 large service-sector firms. 33/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Dollar stores also lean heavily into the tactic of turning nearly every role at its store into a "management" job, because managers aren't entitled to overtime pay. 34/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

That's how you can be the "manger" of a dollar store and take home $40,000 a year while working more than 40 hours every single week.

Understaffing stores turns them into crime magnets. Shootings at dollar stores are routine. 35/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Between 2014-21, 485 people were shot at dollar stores - 156 of them died. Understaffed warehouses are *vermin* magnets. 36/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

In the Eastern District of Arkansas, Family Dollar was subpoenaed after a rat infestation at its distribution centers that contaminated the food, medicines and cosmetics at 400 stores. 37/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

The ILSR doesn't just document the collapse of American communities - it *fights back*, so this report ends with a lengthy section on proven tactics and future directions for repelling the dollar store invasion. 38/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Since 2019, 75 communities have blocked proposals for new dollar stores - more than 50 of those cases happened in 2021/22. 39/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

54 towns, from #Birmingham, AB to #FortWorth, TX to #KansasCity, KS, have passed laws to "sharply restrict new dollar stores, typically by barring them from opening within one to two miles of an existing dollar store." 40/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

To build on this momentum, the authors call for a "reinvigoration of antitrust laws," especially the Robinson-Patman Act. Banning predatory buying would go far to creating a level playing field for independent grocers hoping to fight off a dollar store infestation. 41/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Further, we need the @FTC and @JusticeATR to block mergers between dollar-store chains and unwind the anticompetitve mergers that were negligently waved through under previous administrations (thankfully, top enforcers like #JonathanKantor and @linakhanFTC are on this!). 42/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

We need to free up capital for community banks that will back community grocers. That means rolling back the bank deregulation of the 1980s/90s that allowed for bank consolidation and preferential treatment for large corporations. 43/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

That also reduced lending to small businesses and destroyed regional banks. Congress should cap the market share any bank can hold, break up the biggest banks, and require banks to preference loans for community businesses. 44/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

We also need to end private equity and Wall Street's rollup bonanza.

All of that sounds like a tall order - and it is! But the good news is that it's not just groceries at stake here. 45/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Every kind of community business, from pet groomers to hairdressers to funeral homes, falls into the antitrust "Twilight Zone," of acquisitions under $101m. 46/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

With 60% of #Boomer-owned businesses expected to sell in the coming decade, 2.9m businesses employing 32m American workers are slated to be gobbled up by private equity:https://t.co/PBFocVq2yo 47/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Whether you're burying a loved one, getting dialysis, getting your cat fixed or your dog's nails trimmed, you are already likely patronizing a business that's captured by private equity, where service is worse, prices are higher and workers earn less for harder jobs. 48/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

Everyone has a stake in financial regulation. We are *all* in this fight, except for the eminently guillotineable PE barons, and you know, *fuck those guys*. 49/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

At the state level, the authors propose new muscular enforcement regimes and new laws to protect small businesses from unfair competition. 50/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

They also call on states to increase the power of local governments to reject new dollar store applications, amending land use guidelines to require "cultivating net economic growth, ensuring that everyone has access to healthy food, and protecting environmental resources. 51/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023

If all of this has you as fired up as it got me this morning, check out ILSR's "How to Stop Dollar Stores in Your Community" resources:https://t.co/SEhOUlRhsB 52/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) March 27, 2023