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Dollar store closures impact lower-income, rural customers most

A Consumer Reports survey from 2021 found nearly 90% of Americans shop at dollar stores at least a few times a year.
Dollar store closures impact lower-income, rural customers most
Posted at 2:46 PM, Mar 18, 2024

Even though inflation is cooling, prices are still higher than they were pre-pandemic. They've hit low-income consumers the hardest, which is why many of them shop at dollar stores. 

There are three giants in the "retail value" world: Dollar General, Family Dollar, and its parent company, Dollar Tree.

Despite the store names, most products they carry cost more than a dollar. Dollar Tree's base price is $1.25, while prices at Family Dollar and Dollar General range between $1 and $10. 

In a consumer experiment, a reporter from Scripps News Tampa shopped at four different stores and bought the same five items: a snack pack of tuna, soda, pasta, Kraft Mac & Cheese and a brownie mix. At Dollar Tree, the total for all five products came out to $6.75. They were four cents more at Walmart. The price ticked up to $8.45 at Family Dollar, and the total at Publix was $9.81. 

While prices will vary, dollar stores aren't just about saving money; sometimes, they're the only option.

SEE MORE: Dollar Tree, Family Dollar to close 1,000 locations

"So many smaller mom and pop and independent stores have had to shutter because of competition from dollar stores, and those very communities now are faced with the very real threat of having no retail," said Consumer Reports deputy editor Brian Vines.

A Consumer Reports survey from 2021 found nearly 90% of Americans shop at dollar stores at least a few times a year. Most make under $30,000, live in rural areas and are primarily buying cleaning supplies and home decor. Nearly half of the customers are buying food, the report says. 

Last week, Dollar Tree said it plans to close 600 underperforming Family Dollar locations between now and June. An additional 370 Family Dollar and 30 Dollar Tree stores will close at the end of each store's current lease term, the company said. Vines hopes the closures will turn into an opportunity for bigger retailers to jump in and help underserved markets."We're thinking about independent grocery stores or other folks who can really provide robust offerings. They see fertile ground now that those value retailers who've undercut them in the past aren't operating in the space," he said. 

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