Why Dollar Stores Are Replacing Grocery Stores

Dollar Stores are overtaking grocery stores in some parts of the United States because those who reside in food deserts typically have easier access to one.

By Jennifer Hollohan | Published

grocery stores items dollar tree dollar stores

Shopping at local grocery stores is becoming increasingly frustrating between the high costs and empty shelves. And while there is not much the average consumer can do about the latter, they have found a way to curb costly food bills. A recent study showed that Americans are flocking to dollar stores for their groceries, which may be surprising news to many.

Dollar stores are great places to pick up cheap toys, household items, or holiday decorations. But if you have never shopped at one, you may not realize they also have a decent-sized food selection. While most items are pre-packaged and non-perishable, it is also possible to find some refrigerated and frozen products.

The selection is not large enough to rival grocery stores in many parts of the country. However, in some parts of the country, dollar stores are the closest place to pick up necessary food items. In fact, 75% of Americans live within 5 miles of a dollar store.

That proximity means many Americans in food deserts can access groceries without paying for gas to get to grocery stores that are further away. But ironically, the existence of dollar stores only contributes to the problem of food deserts. Most of them do not offer fresh, high-quality food like produce. 

Unfortunately, that factor is not stopping people from opting for dollar stores over grocery stores. The American Journal of Public Health published a study on Thursday that uncovered just how great this shift is. It looked at data collected from 2008-2020, sourced from 50,000 households nationwide. 

According to Vice, “What they found is that a smaller share of food purchases are being done at grocery stores, and a growing amount of food is bought at dollar stores, as well as larger shopping centers and department stores.” This discrepancy was greater in certain portions of the US, like the southern and rural areas. The latter saw a nearly 103% growth in food purchases at dollar stores during the study period.

Additionally, the study’s authors determined that “dollar stores were the fastest growing retail channel,” far surpassing even chains like Walmart or Costco. And that news is worrisome due to the lack of healthy food options. For example, Dollar General sells produce, but only at 3,000 of its locations.

To put that in perspective, the chain will have opened over 2100 new locations between 2022 and 2023. Its rapid growth is good news for areas that don’t have convenient access to grocery stores. But it does not bode well for the overall health of Americans.

So a handful of states and municipalities have taken steps to combat the rapid rise in dollar stores. New Orleans, Kansas City, Oklahoma City, Fort Worth, Tulsa, and Akron are among them. And Birmingham is so concerned about the prevalence of dollar stores that it has taken very aggressive steps.

The city will invest $500,000 into new grocery stores. And it has banned any dollar store from opening within a mile of an existing location. Hopefully, these steps will help families get better access to healthier foods.