Dollar stores rising in popularity as food retailers in rural America

Dollar stores are now the fastest-growing food retailers in the contiguous U.S. — a trend that could have serious implications for nutrition policy, a new study has found.

Households that make the most purchases at such stores — which have doubled their footprint in rural America over the past decade — tend to be lower-income and headed by people of color, according to the study, published in the American Journal of Public Health on Thursday.

Food and beverages stocked by dollar stores are usually lower in nutrients and higher in calories, with only a small percentage of such shops selling fresh produce and meats, the authors find.

The presence of these stores is rapidly expanding in the remote South, where baseline levels of obesity and food insecurity are already high, the researchers warned.

“Dollar stores play an increasingly important role in household food purchases, yet research on them is lacking,” first author Wenhui Feng, a Tufts University professor of healthcare policy, said in a statement.

“Many localities have established policies such as zoning laws aiming to slow dollar store expansion even though we don’t fully understand the role that they play,” she added.

Feng said her inspiration for this study came from rural road trips she took throughout the U.S. after completing her doctorate. Enroute, she observed that remote highways were dotted with dollar stores.

“It was surprising to see this one type of business dominated many areas that I visited. I was intrigued,” Feng said.

To conduct 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 that includes about 50,000 households.

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

The researchers found that as people’s income decreased, the share of food purchases they made in dollar stores increased.

Nationwide, dollar stores were responsible for about a 2.1 percent share of household food purchases as of 2020, according to the study.

But in rural and low-income areas, people tend to spend more than 5 percent of their food budget at such retailers, the authors observed.

This share was even greater for rural non-Hispanic Black households, which spend about 11.6 percent of their food budgets in dollar stores, per the study.

Over the decade studied, dollar stores were the quickest-growing food retail channel in rural regions, increasing their share of household food purchases by 102.9 percent during that time, according to the study.

This trend applied in particularly large numbers to communities in the rural South, the researchers found.

“The South is a hot spot,” 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 also more consumer demand.”

Although dollar stores tend to lack fresh foods on their shelves, they do fill an important void for individuals living in remote areas, the authors acknowledged.

Their rise in popularity could therefore be seen in a positive light, as they provide consumers with food choices in low-access areas, the researchers noted.

Yet on the other hand, a recent surge in dollar store food expenditures is also raising concerns that such stores could force local grocers out of business, according to the study.

Going forward, Feng and Cash said they plan to study health and dietary outcomes — exploring the types of food people usually purchase at dollar stores.