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Interesting piece in the Washington Post that looks at a study from the Institute for Self-Reliance, a nonprofit advocacy group, arguing that dollar stores - which have “gained attention as success stories in the country’s most economically distressed places” - in fact are more hurtful than helpful when it comes to helping residents deal with poverty.

Here’s how the story frames the issue:

“In cities, dollar stores trade in economic despair, with many residents saying they are a vital source of cheap staples. But as the stores cluster in low-income neighborhoods, some residents worry the stores deter other business, especially in neighborhoods without grocers or options for healthful food. The Institute for Self-Reliance, a nonprofit advocacy group, argued in a December report exploring the effect of dollar stores in Tulsa that ‘there’s growing evidence that these stores are not merely a byproduct of economic distress. They’re a cause of it.’ Dollar stores rarely sell fresh produce or meats, but they can undercut grocery stores on prices of everyday items, often pushing them out of business.”

The dollar store format “‘creates an overall sense of the neighborhood being run-down,’ said Stacy Mitchell, the co director of the Institute for Local Self-Reliance. ‘It’s a recipe for locking in poverty rather than alleviating it.’
Grocery stores run on thin profit margins — usually between 1 and 3 percent. And they employ more workers than dollar stores to keep perishable food stocked.”

The response to this sense is that some cities - like Tulsa, Oklahoma, and Mesquite, Texas - are developing legislation that will prevent or inhibit the expansion of these kinds of stores in specific neighborhoods, with a greater emphasis on finding ways to attract grocery stores that will sell fresh, healthier food.
KC's View:
It probably isn’t fair to say that dollar stores cause poverty; they are a response to it, not an instigator. But it may be entirely fair to say that in their choice of products, they may not being doing people suffering from economic distress any favors.

If indeed, as as happened, a growing awareness of this issue means that some dollar stores are acting to have items such as “grapes, apples, avocados, potatoes sandwiched between bags of fried pork skins and cases of Michelob Ultra,” then that’s a good thing. Serving a community ought to mean more than just profiting off its lack of good luck and marketing to the lowest common denominator.