Dollar Stores and Grocery Stores — Blogs

As dol­lar stores grow in pop­u­lar­i­ty, some munic­i­pal­i­ties have tried to crack down on them. I have always thought of dol­lar stores as an amenity—but some politi­cians claim that dol­lar stores are so effi­cient that they make it impos­si­ble for reg­u­lar gro­cery stores to com­pete, which in turn is bad because neigh­bor­hood res­i­dents can­not eas­i­ly access the fresh fruits and veg­eta­bles that are only acces­si­ble at gro­cery stores.

This argu­ment is based on the assump­tion that gro­cery stores and dol­lar stores can­not coexist—that is, that a gro­cery store is a nat­ur­al monop­oly that can­not sur­vive com­pe­ti­tion, much like cer­tain pub­lic util­i­ties. In mid­dle-class urban neigh­bor­hoods, this assump­tion would obvi­ous­ly be silly—but per­haps it might be true in low-income urban areas* with low buy­ing pow­er.

I work in Cen­tral Islip, a low-income Long Island sub­urb where a Fam­i­ly Dol­lar and a gro­cery store are neigh­bors in a strip mall across the street from a com­muter train sta­tion. So I am pre­dis­posed to think that even in low-income areas, the “nat­ur­al monop­oly” the­o­ry is wrong. But per­haps this rela­tion­ship is unusu­al, and Cen­tral Islip is sim­ply not poor enough to dis­prove the the­o­ry. So to exam­ine the argu­ment more close­ly, I decid­ed to look at low-income parts of two cities that have recent­ly passed anti-dol­lar store leg­is­la­tion: Tul­sa and New Orleans.

In Tul­sa, I focused on the low­er-income north side of Tul­sa, and found nine Dol­lar Gen­er­al stores in that area.** Three of the Dol­lar Stores were with­in half a mile of a gro­cery store; the clos­est was just .2 mile away.*** What about the oth­er six loca­tions? All were with­in one to two miles of a gro­cery; the least con­ve­nient loca­tion, at 2811 North Peo­ria is 1.3 miles from a Quik­trip at 1513 N. Peo­ria, and 2.5 miles from a much larg­er Las Amer­i­c­as super­mar­ket at 2415 E. Admi­ral. Admit­ted­ly, 2.5 miles is not real­ly walk­ing distance—but Tul­sa is a low-den­si­ty, auto-ori­ent­ed city where not much is with­in walk­ing dis­tance of any­thing else; the North Peo­ria loca­tion in a zip code (74106) with just over 2400 peo­ple per square mile, low­er than the city­wide aver­age for car-ori­ent­ed cities like Hous­ton and Atlanta. Although car own­er­ship is low here by Tul­sa stan­dards, even in 74106 over three-quar­ters of house­holds have a car. For car-own­ing house­holds, a two-mile trip to a gro­cery store is not par­tic­u­lar­ly incon­ve­nient.

In New Orleans, the city’s anti-dol­lar store leg­is­la­tion is lim­it­ed to the New Orleans East area, which has four Dol­lar Gen­er­al stores in about a dozen square miles. Of the four stores, all but one were with­in 0.6 miles of a super­mar­ket, and the fourth was vir­tu­al­ly next door to a con­ve­nience store and 1.1 miles from a more sig­nif­i­cant gro­cery store.*****

It there­fore appears that even in a low-den­si­ty city, a large minor­i­ty of dol­lar stores are with­in a short walk of gro­cery stores, and the rest are with­in a long walk or a very short dri­ve. In a medi­um-den­si­ty city like New Orleans, most dol­lar stores are with­in walk­ing dis­tance of gro­cery stores. So the “nat­ur­al monop­oly” claim seems inap­plic­a­ble to urban Amer­i­ca.

I note that the anti-dol­lar-store argu­ment would be more per­sua­sive if dol­lar stores were the only com­pe­ti­tion to tra­di­tion­al gro­cery stores. Of course this is not the case. Even in Tul­sa, any­one with access to a car can get gro­ceries at a Wal-Mart, or get a more lim­it­ed selec­tion of gro­ceries at a nation­al phar­ma­cy such as Walgreen’s or CVS. In New Orleans East, a vehi­cle is not always nec­es­sary to reach these destinations—in addi­tion to a Wal-Mart, this area has three Wal­greens stores and a CVS. So even where gro­cery stores are clos­ing, dol­lar stores are not the only rea­son. 

*And per­haps in cer­tain rur­al areas as well, where low pop­u­la­tion den­si­ty lim­its the com­pet­i­tive­ness of gro­cery stores. 

**The address­es are 1225 E. 46th, 1906 N. Har­vard, 744 E. Pine, 3932 and 7854 E. Admi­ral Place, 2811 and 6510 North Peo­ria, 1820 N. Lewis, and 1115 N. Sheri­dan. Because dol­lar stores tend to clus­ter togeth­er, I chose to focus only on one chain. A more exten­sive study might include oth­er chains.

***The 6510 N. Peo­ria address is near a Ware­house Mar­ket at 6230 N. Peo­ria. In addi­tion, the North Lewis store is near a Save-A-Lot at 1526 North Lewis, and the North Sheri­dan store is near a Ware­house Mar­ket at 845 N. Sheri­dan.

****The address­es were 10600 Chef Menteur High­way (.2 miles from Chef’s Mar­ket at 10833 Chef Menteur, and also 0.6 miles from a Winn Dix­ie), 11020 Mor­ri­son Road (0.5 miles from Read Super­mar­ket at 7045 Read Blvd.), 6500 Down­man (0.6 miles from Down­man Super­mar­ket at 4827 Down­man Road), and 5700 Crow­der (about a block from Sam’s Meat Mar­ket at 8426 Inter­state 10 Ser­vice Road, and 1.1 miles from Sohana Gro­cery at 9000 Chef Menteur).

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