Some say the stores — disproportionately found in low-income, rural, and Black areas — stifle economic growth and job creation, and exacerbate food insecurity.

For years, the Rev. Donald Perryman wondered why the formerly thriving Black downtown of Toledo, Ohio, couldn’t get a grocery store.

His suspicions were confirmed after a city study found in 2020 that the opening of new Dollar General stores drove other companies out of business, deterring potential grocers from investing there. He, along with a group of ministers, knew that in order to get a supermarket, they had to stop new chain dollar stores from plaguing their communities. They made great strides when the Toledo City Council passed a moratorium the same year that required new small-box retail stores to apply for a special-use permit.

The moratorium expired a year later, however — without the community’s knowledge — and a new Dollar General opened down the street from Perryman’s church on Dorr Street.

This month, the city proposed a $12 million project to construct a food incubation hub that would deliver fresh and healthy foods to local markets and low-income areas such as Dorr Street. Without renewed legislation, Perryman fears the threat of another dollar store could jeopardize the project, halting their years-long efforts.

The ongoing fight in Toledo represents one of many small-scale efforts nationwide to restrict Dollar General and Dollar Tree, which owns Family Dollar, the fastest-growing food retailers in the U.S. Some Black residents and elected officials argue the stores stifle economic growth and job creation, and exacerbate food insecurity. The stores are also disproportionately in areas that are low-income, rural, and Black, which experts say is racist.

Dollar stores are not only concentrated in low-income Black neighborhoods, but in high-income Black communities as well.

An April study by the Brookings Institution found that wealthy Black neighborhoods in metro areas such as Dallas, Los Angeles, and New York, were less likely to be within 1 mile of a premium grocery store than wealthy neighborhoods with fewer Black residents.

Andre Perry, senior fellow at Brookings Metro and co-author of the report, said the lack of a grocery store signals to other investors and businesses that the area is not worth investing in, which leads to weaker tax bases and more dollar chain stores.

Ashanté Reese, assistant professor of African and African Diaspora Studies at the University of Texas at Austin, said this isn’t a money problem, but a racism problem, and the issue is even more dire in resource-strapped rural areas.

“We could put a whole bunch of reasons why stores say they locate where they do or where they don’t, but a large part of this truly has come down to racism and a lack of

imagination,” Reese said. “The fact that our food system is largely driven by corporate chains is a problem because they are definitely profit driven in a way that doesn’t leave a lot of room to care about people.”

Dollar General and Dollar Tree operated more than 34,000 stores at the beginning of last year, more than McDonald’s, Starbucks, Target, and Walmart combined, according to research from the Institute for Local Self-Reliance. In the future, they plan to grow to more than 51,000 stores.

Over the years, dollar stores have expanded their food options, which tend to be mostly packaged, higher in calories, and lower in nutrients, a Tufts University study found. Researchers wrote that the dollar stores may be filling food voids where local grocers do not have enough businesses to support maintaining a store, leaving residents with fewer food options, especially in rural areas.

In rural and low-income areas, people, on average, spend more than 5% of their food budget at dollar stores. In rural Black households, they spent nearly 12%. One reason: They are likely to be located further from grocery stores.

The limited healthy food offerings is a major criticism of the stores. It is why some Black leaders have been leading the charge to stop dollar stores from suffocating their communities.

Furthermore, while the products seem cheaper, many of the products are packaged in smaller quantities and cost more per unit sizce. 

According to state Sen. Mary Washington “There are some people in the communities that feel like, ‘What do you got against dollar stores?’ … They provide quality things for poor people,’” Washington said. “When you explain … they sell canned goods that are very close to the expiration day, or they’re expanding their grocery section so now we can’t get a full service grocery store into the community … they get it.”