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Dollar Stores Now the Fastest-growing Food Retailers as Americans Tighten Their Budgets

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By John Anderer

A dollar just doesn’t go as far as it used to, and that’s probably most apparent for many Americans during their weekly trip to the grocery store. Food and drink is an absolute essential for us all, but many of the prices seen in supermarket aisles today make the most basic of foods look more like luxuries. Now, new research suggests many are opting to do their grocery shopping at the local discount store.

A team from Tufts University reports that dollar stores have become the fastest-growing food retailers in the United States. Specifically, they’ve doubled their share in rural regions. Researchers note households who do most of their shopping at dollar stores tend to be lower income and headed by people of color.

This project is the first to examine this trend over the past decade, and researchers say their findings hold meaningful implications for nutrition policy. Unsurprisingly, foods and drinks for sale at dollar stores are usually lower in nutrients and higher in calories. Even worse, most dollar stores don’t even sell fresh produce and meats. It’s also worth noting that their footprint is growing the most in the remote South; such regions already have higher baseline levels of obesity and food insecurity.

“Dollar stores play an increasingly important role in household food purchases, yet research on them is lacking. 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,” says firth author Wenhui Feng, the Tufts Health Plan Professor of Health Care Policy, in a university release. “Our study is one of the first to use nationally representative data to see the role of dollar stores at the household level.”

Study authors took an eye-opening road trip

Study authors were inspired by a series of rural road trips. While completing her doctoral program, Prof. Feng vacationed throughout the United States, traveling remote highways littered with dollar stores.

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

Sean Cash, Bergstrom Foundation Professor in Global Nutrition and associate professor at the Friedman School of Nutrition Science and Policy, also had a similar experience while visiting his small hometown in upstate New York. He saw local residents crowding the nearby dollar store for groceries.

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While those accounts are anecdotal at best, this research confirms their observations. The pair, along with study co-author Elina T. Page from the U.S. Department of Agriculture’s Economic Research Service, analyzed how Americans use dollar stores to access food. This was achieved by investigating food-purchase data provided by the IRI Consumer Network, a nationally representative panel of about 50,000 households.

The dataset encompassed purchases made between 2008 and 2020, and painted a provocative picture of nutritional divides. Households headed by individuals of color, households in rural areas, and households with lower incomes have all become increasingly dependent on dollar stores.

Generally speaking, as a person’s income increases, they tend to spend less at dollar stores. However, the study also found that in rural and low-income areas, people spend, on average, more than five percent of their food budget at dollar stores. More specifically, rural non-Hispanic Black households spend 11.6 percent of their food budgets in dollar stores, while households in the rural South also spend a lot in their local dollar stores.

“The South is a hot spot,” Prof. Cash comments. “The dollar-store business model originated in the South. They have more distribution centers there, and there’s also more consumer demand.”

Dollar stores have changed drastically over the years

These findings highlight how dollar stores have changed over the years. Decades ago, discount shops focused on personal care and craft items. Today, such stores offer prepackaged, shelf-stable food items. It may be convenient and cheap to pick up dinner at a dollar store, but the food will be significantly less healthy.

“When you start to look at race and ethnicity, there are some implications about equity in terms of people’s access to healthy food,” Prof. Feng explains.

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Study authors also made it a point to note that the rise of dollar stores isn’t all bad, especially for those living in remote areas. These stores indeed provide people with food options in low-access areas. On the other hand, there is also a concern that the recent growth in dollar store food expenditures may force out local grocers through competitive pricing.

Moving forward, study authors plan to research health and dietary outcomes in the future, with an emphasis on the types of food typically purchased at dollar stores.

“We are now working on a study to see how the healthfulness of the foods purchased in dollar stores compared to other retail outlets,” Prof. Feng says.

All in all, the research team adds that while dollar stores may be ripe for food-policy intervention, it’s highly unlikely such budget shops will actually overtake supermarkets anytime soon.

“Our data clearly show dollar stores are the fastest-growing format in terms of their share of the food dollar. At the same time, even in the groups that are most impacted in income, racial, and geographic demographics, it’s still 10 percent or less,” Prof. Cash concludes.

The study is published in the American Journal of Public Health.

Source: Study Finds

John considers himself a pretty nice guy, and an even better writer. He is admittedly biased, though.

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