Dollar stores such as Dollar General and Dollar Tree (which also owns Family Dollar) are becoming a primary source of food for many families. The chains feed more Americans than Whole Foods,¹ which isn’t surprising when you consider there are 30,000 Dollar General and Dollar Tree stores across the U.S. — outnumbering Walmart’s and McDonald’s’ combined — compared to 446 Whole Foods locations. 

The dollar store chains also claim to have their sights on yet another 20,000 locations. The problem with this trend is that dollar stores typically do not carry fresh food; it’s primarily ultra-processed packaged foods and canned foods, which we know is a recipe for ill health in the long term. 

Sadly, dollar stores specifically target urban neighborhoods and small towns where economic struggles are commonplace,² turning these areas into food deserts as they push out smaller, already struggling grocers. As reported by Institute for Local Self-Reliance (ILSR):³

“Although dollar stores sometimes fill a need in places that lack basic retail services, there’s growing evidence that these stores are not merely a byproduct of economic distress. They’re a cause of it.

In small towns and urban neighborhoods alike, dollar stores are leading full-service grocery stores to close. And their strategy of saturating communities with multiple outlets is making it impossible for new grocers and other local businesses to take root and grow.”

Driving this trend is the U.S. government’s subsidy of processed food, both through the Farm Bill and through the Supplemental Nutrition Assistance Program (SNAP). This sets the stage for discount stores to monopolize the food market, which subsequently leads to poorer diets, higher disease rates and associated health care costs. 

In truth, food subsidies and health care really cannot be separated, as the nation’s diet is a primary contributor to chronic disease and therefore drives our health care expenditures. The idea that big box stores and dollar stores are doing Americans a favor by making inexpensive food more available is a twisted one, as it’s really just making people sicker. 

Racial Discrepancies 

ILSR also notes that dollar stores tend to target areas based on race rather than income. Using Tulsa, Oklahoma, as an example, ILSR shows how these stores are congregated in census tracts with more African-American residents, even though there are low-income Caucasian areas as well. 

“One reason for this link might be that dollar stores see an easier revenue stream in places that lack competing grocery stores,” ILSR writes. “In the case of Family Dollar, for example, ‘Food deserts’ are its sweet spot,” notes Ann Natunewicz, an analyst at Colliers International.

The absence of grocery stores is, in turn, a direct result of a history of racial discrimination by banks that have been less likely to lend to African American entrepreneurs and by supermarket chains that have tended to bypass black neighborhoods.”

How a near-total diet of ultra-processed food affects health and longevity can be seen in the city’s mortality statistics. Life expectancy in north Tulsa, which is predominantly black, is a staggering 14 years lower than that of the south. In an effort to address this disparity, Tulsa’s city council has enacted a dollar store ordinance that limits dollar stores in the northern part of Tulsa and provides incentives for full-service grocers instead. As reported by ILSR:⁴

“This is the first ordinance in the country to specifically target dollar stores, and its passage is being felt both locally and nationally. It’s marked a new era of political inclusion and grassroots power for the city’s African American residents. It’s also focused national attention on the growth of dollar stores and inspired other cities and towns to take steps to check their spread.

Who Benefits From Government Food Subsidizes?

In the U.S., 12.4 percent of the population, some 40 million in all as of 2017,⁵ live at or below the poverty line and rely on a monthly allotment of food stamps through SNAP to cover their food bill. Today, these monies are doled out once a month via electronic benefit transfer (EBT) cards. 

Disturbingly, the fastest-growing group of people on food stamps are people who have jobs and work year-round. Ironically, many of them work in the very same big box stores and discount outlets that profit from the SNAP benefits their employees are forced to use due to low wages. 

In 2017, the program distributed $76 billion worth of EBT transfers, and across the country there are about 240,000 retailers approved by the federal government to accept EBT cards (i.e., food stamps). 

A 2014 article⁶ in Slate Magazine addressed a little-discussed facet of the food stamp subsidy — which stores actually profit from this program, funded by tax dollars, and how much. As it turns out, this data is actually kept confidential. 

“Even basic facts such as how many food stamp dollars go to a particular store in a particular location are not publicly available,” Slate notes. “In what stores and neighborhoods are the most food stamp dollars spent? What kinds of foods do those stores promote and sell? What are the store’s business and labor practices?

The answers to those questions might help you see how food stamp subsidies are serving a community — if they’re doing what they were meant to do.”