Do More Dollar Stores Hurt The Poor?

Dollar stores seem to be popping up everywhere, but with their existence comes some controversy. Criticizers reportedly say that these dollar stores hold back local competition and reduce poor consumers access to healthy foods.

According to CNN, the expansion of dollar stores has been put on hold in many cities and in some cases are preventing new locations from operating within one mile of another.

Cities such as Birmingham, Alabama, Oklahoma City, Tulsa, Oklahoma, and Mesquite, Texas, all have passed similar legislation while New Orleans, Cleveland, and Fort Worth, Texas, are also exploring passing laws against dollar store expansions in their cities.

"We are disappointed that a small number of policymakers have chosen to limit our ability to serve their communities," Crystal Ghassemi, spokesperson for Dollar General told the news outlet. "We believe the addition of each new Dollar General store represents positive economic growth for the communities we serve."

Dollar General (DG) and Dollar Tree (DLTR), which owns Family Dollar has a combined 30,000 stores in the U.S. In comparison, Walmart’s has 4,700 U.S. locations. Both Dollar General and Dollar Tree have plans to open a combined total of 24,000 more locations throughout the U.S.

Opponents of the dollar store model say that these chains intentionally put up multiple locations in low-income areas, which they claim prevents supermarkets from opening new locations in these areas while threatening mom-and-pop stores, CNN reported.

Dollar Tree and Dollar General reportedly contend that they do offer a benefit to low-income communities by offering convenience and low prices to consumers on a budget.

Shares of Dollar General stock were down 0.82 percent as of 3:45 p.m. ET on Friday while share of Dollar Tree stock were down 1.45 percent at the same time.