Dollar stores rising in popularity as food retailers in rural America

Dollar stores are now the fastest-growing food retailer stateside—a trend that could have serious implications for nutrition policy, a new study finds.

According to the study, published in the American Journal of Public Health, the households that bought the most at these stores over the past decade tended to be lower-income households and were headed by people of color. Thursday.

The authors found that food and beverages stocked at dollar stores are often lower in nutrients and higher in calories, and that only a small percentage of such stores carry fresh produce and meat.

The presence of these stores is expanding rapidly in the far south, where baseline levels of obesity and food insecurity are already high, the researchers warn.

“Dollar stores are playing an increasingly important role in household food purchases, but research on them is lacking,” lead author Wenhui Feng, a professor of healthcare policy at Tufts University, said in a statement.

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“Many places have policies, such as zoning laws, designed to slow the expansion of dollar stores, although we don’t fully understand the role they play,” she added.

Feng said she was inspired to conduct the study by rural road trips she took across the United States after completing her Ph.D. On the way, she observed dollar stores dotted along remote highways.

“I was surprised to see this type of business dominate in many of the areas I visited. I was curious,” Feng said.

For the study, Feng and her colleagues said they analyzed food purchase data from 2008 to 2020 through the IRI Consumer Network, a nationally representative database of about 50,000 households.

They found “a provocative picture of nutritional disparities, with households headed by people of color, households in rural areas, and those with lower incomes increasingly reliant on dollar stores,” the authors said in a statement.

The researchers found that as people’s income decreased, the proportion of their food purchases at dollar stores increased.

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According to the study, dollar stores accounted for approximately 2.1 percent of household food purchases nationwide as of 2020.

But the authors observed that people in rural and low-income areas tended to spend more than 5 percent of their food budgets on these retailers.

It’s even higher for rural non-Hispanic black households, who spend about 11.6 percent of their food budgets at dollar stores, according to the study.

Dollar stores were the fastest-growing food retail channel in rural areas over the past decade studied, increasing their share of household food purchases by 102.9 percent during that time, according to the study.

The researchers found that this trend holds especially true for southern rural communities.

“The South is a hotspot,” senior author Sean Cash, a food economist at Tufts University’s Friedman School of Nutrition Science and Policy, said in a statement.

“The dollar store business model originated in the South,” Cash continued. “They have more distribution centers there, and there’s more demand from consumers.”

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The authors acknowledge that while dollar store shelves are often lacking in fresh food, they do fill an important void for individuals in remote areas.

Their rise in popularity can therefore be viewed in a positive light, as they provide consumers with food options in less accessible areas, the researchers note.

On the other hand, however, the recent surge in food spending at dollar stores has also raised concerns that those stores could force local grocers out of business, according to the study.

Going forward, Feng and Cash say they plan to study health and diet outcomes—exploring the types of food people typically buy at dollar stores.

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